Slaughters chief hits out at PEP obsession

Slaughter and May senior partner Tim Clark has described the legal market’s focus on average profit per equity partner (PEP) as a “negative influence”.

Clark debates the best measure of firm performance with Allen & Overy managing partner David Morley, Clifford Chance managing partner David Childs, DLA Piper CEO Nigel Knowles and Freshfields Bruckhaus Deringer CEO Ted Burke in The Lawyer today.

Slaughters’ Clarke said: “The profit per partner approach, equity or otherwise, that The Lawyer introduced is a better comparator since it shows the rate of profit by ownership and is less susceptible to distortion through the firm’s approach to its equity than PEP.”

Clark added that, in Slaughters’ view, equity partnership was the key to a successful partnership. “The creation of other classes of partnership is likely to give rise to issues within the firm,” he said.