Revealed: the City’s true £1m partners

A total of 12 firms saw their most senior partners take home an equity share in excess of £1m in the last financial year, while just three firms posted an average earnings per partner (EPP) figure of more than £1m.

According to figures published today (3 September) in the inaugural The Lawyer UK 200 Annual Report, Linklaters, Freshfields Bruckhaus Deringer and Slaughter and May all broke through the £1m EPP mark, the former two for the first time.

In contrast, seven firms posted average profit per equity partner (PEP) figures of more than £1m, while a dozen firms recorded £1m or more for remuneration allocated to partners at the top of the equity.

Last month Slaughters senior partner Tim Clark hailed the EPP measure introduced by The Lawyer as “a better comparator” than PEP, as it was less susceptible to distortion through a firm’s approach to its equity.

The table published today highlights this distortion, revealing the proportions of full equity and non-equity partners at some of the UK’s largest firms.

It includes nine firms – Cobbetts, DLA Piper, DWF, Halliwells, Howard Kennedy, TLT Solicitors, Trowers & Hamlins, Ward Hadaway and Weightmans – where 70 per cent or more of partners did not share fully in the equity.

Last year the equivalent number above this benchmark was seven, a fact that highlights the increasing tightness of the equity at the UK’s leading firms.

Although DLA Piper, for example, increased its equity partner headcount by 13 last year, the proportion of full-equity partners remained static at 29 per cent.

The firm with the lowest proportion of equity partners last year was DWF, with just 21 per cent.

Newcastle’s Watson Burton, which held this position in 2005-06 with a 17 per cent equity, opened up its equity during the year to give 40 per cent of its partners a full equity share.

Top 10 firms by earnings per partner, 2006-07Rank UK 200 Firm Earnings Profit per Earnings per Non -equity Rank per partner equity non-equity partners as % of (£K) partner (£K) partner (£K) partnership¶ 1 7 Slaughter and May 1,585 1,620 600 4 2 3 Freshfields Bruckhaus Deringer 1,034 1,034 N/A 0 3 2 Linklaters 1,022 1,152 357 17 4 4 Allen & Overy 880 1,025 335 21 5 28 Macfarlanes 870 1,100 344 30 6 77 Dickson Minto 845 1,150 175 32 7 10 Ashurst 771 956 251 26 8 1 Clifford Chance 760 1,015 319 36 9 33 Travers Smith 702 817 160 18 10 9 Herbert Smith 616 820 286 38