When private equity partner David Higgins started his new role in the City office of US law firm Kirkland & Ellis in April, he came with the weight of expectation generated by a reported $10m (£7m) salary.
Higgins’ salary, which works out at nearly $200,000 per week, is almost unprecedented in the London legal market.
However, with salary inflation driven by the arrival of big-spending US law firms in the City he is far from unique in earning a salary that would be the envy of some bankers or footballers.
Although information about who gets paid what is a closely guarded secret, City A.M. has spoken to partners and legal recruiters to ascertain who the best paid lawyers in London might be – and what they could be making.
Unsurprisingly, almost all of them hail from top US law firms, which pay significantly more than their UK rivals.
They are also all men, which, given the pretty dire gender diversity among the upper ranks of top law firms, is also sadly unsurprising.
US firms are able to offer star partners rich rewards because they tend to operate an “eat-what-you-kill” system, where partners receive a share of what they bring through the door. Star partners are also often hired on guaranteed two-to-three year pay packages.
The Magic Circle, the five London headquartered law firms that have traditionally dominated City law, operate lockstep remuneration models, where partner earnings are decided by seniority, rather than just performance.
In response to the depredations of US firms, the London firms have moved to modify their pay systems in order to better reward their top performers.
Higgins’ former firm Freshfields Bruckhaus Deringer has recently tweaked its remuneration system so partners at the top of the lockstep ladder will be paid £3.5m a year.
One legal recruiter argues that the merit-based systems used by US firms will make it very difficult for UK rivals to hold onto their best lawyers, even after moving away from pure lockstep models.
“What Freshfields and the Magic Circle are doing with stretching their equity is a sticking plaster in the context of what the US firms are able to pay,” said one top headhunter.
“The gap is getting bigger – and fast, we barely do any work with UK firms now because it makes more sense to pull people out of them for US firms,” they add.
While this list is not comprehensive, it aims to give a flavour of the dramatic shift in pay and power at the top of the City’s legal world.
Who are the City's best paid lawyers?
Private equity partner David Higgins joined Kirkland from Freshfields in April for a widely reported $10m a year pay-packet. One US firm partner said that they “almost felt sorry” for Higgins, because every time his name was mentioned it came alongside his hefty price tag. However, remuneration on this scale demonstrates the impressive clout achieved by Kirkland, as well as Higgins’ star ranking in the sector.
London co-managing partner Stephen Lucas joined Kirkland from US firm Weil, Gotshal & Manges in 2014 on a reported $8m per annum three-year package, which sources say has now risen to $10m. Finance partner Lucas was reportedly paid $5.5m a year at Weil before heading to Kirkland.
Latham & Watkins leveraged finance star Richard Trobman is currently co-managing partner of the world’s second-wealthiest law firm following the dramatic defenestration of former boss Bill Voge after a sex scandal. Sources put his pay at between $7-8m. His practice focuses on complex finance work for clients such as private equity firms Cinven, Carlyle and EQT and investment banks JP Morgan, Credit Suisse and Deutsche Bank.
Not only does Kirkland partner Neel Sachdev command top dollar, he was also once named as London’s sexiest lawyer by website Legal Cheek. Sources said that Sachdev is paid between $7-8m a year. His clients include financial sponsors such as 3i, Carlyle, Lone Star and Warburg Pincus.
Richard East is co-London head of US litigation firm Quinn Emanuel Urquhart & Sullivan which has made fortunes for its partners by suing banks in the wake of the financial crisis. The firm is run by eccentric mountain-climbing founder John B Quinn who personally decides on each partner’s remuneration. East joined Quinn from Kirkland to co-found its London office in 2008. Although Quinn’s pay system is more opaque than most, sources estimate East’s pay at between $7 and $8m.
Former Linklaters restructuring star Yushan Ng joined US firm Cadwalader Wickersham & Taft in 2012 on a $4-5m salary. In January he jumped to US firm Milbank for north of $5m a year, according to sources, alongside three fellow restructuring partners. His clients include Oaktree Capital Management, Apollo International and Centerbridge Capital Partners.
High-yield finance heavyweight Apostolos Gkoutzinis joined Milbank Tweed Hadley & McCloy this year from US rival Shearman & Sterling where he was head of the firm’s Europe and Middle East capital markets practice. According to one source, while at Shearman Gkoutzinis’ clients were bringing in between £20m and £30m a year, making him an attractive proposition for any firm in the City. Sources say Milbank stretched above $5m to bring in the finance star.
Former Clifford Chance funds head Jason Glover joined New York firm Simpson Thacher & Bartlett in 2010 where he is managing partner of its London office. Sources say he is paid at least $5m per year. Legal directory Chambers & Partners ranks him as a “star individual” in the fund formation space where he acts for private equity firms such as Bridgepoint, Cinven, Apax, BC Partners, and Triton.
Once half of an Ant & Dec-style private equity double act alongside Richard Youle, Ian Bagshaw is now flying solo at White & Case after Youle’s departure to US firm Skadden Arps Slate Meagher & Flom last year. Bagshaw and Youle climbed the ranks at Magic Circle firm Linklaters together before jumping ship to US firm White & Case in 2014. Bagshaw, who initially joined White & Case on a $4m per-year deal, is now likely to be paid up to $5m, say sources. He acts for clients such as Triton Partners, Carlyle Group and CVC Capital Partners.
Simon Twigden rolled the dice and won when he led a breakaway group of lawyers from Addleshaw Goddard to found litigation boutique Enyo Law in 2010. With no client conflicts, Enyo has been able to take on major cases against financial institutions and has been richly rewarded for doing so. The firm’s accounts show that its top paid partner received £3.5m last year, with sources indicating that Twigden was the lucky individual.
Clearly not one to follow the crowd, high-yield specialist Ward McKimm moved from Kirkland to Freshfields in 2015. His move caused ripples in the market, not least because Freshfields gave him a deal outside of its lockstep structure, understood to be $4.2m a year, which made him one of the best paid lawyers at a UK firm in London.