Average partner profits at the UK’s top 50 law firms hit £750,000 last year as the sector continued to expand despite an uncertain economic and political backdrop.
Nine firms posted average profit per equity partner (pep) of over £1m, according to new research published today by website Legal Week.
Partners at Magic Circle firm Slaughter and May led the way with an estimated pep of £2.3m.
City firm Macfarlanes was the second-biggest payer with pep of £1.7m.
Freshfields Bruckhaus Deringer was the pick of the remaining Magic Circle firms with pep of £1.8m.
Magic Circle firms Linklaters, Allen & Overy and Clifford Chance posted pep of £1.69m, £1.66m and £1.62m respectively.
Other top performers include transatlantic giant DLA Piper with pep of just under £1.4m, City firm Travers Smith with pep of £1.2m and leading litigation firm Mishcon de Reya with pep of £1m.
Travers Smith senior partner David Patient said: “Last year was another strong one for the UK legal market and City firms. Despite lots of Brexit uncertainty and moving the goalposts for us leaving the EU, there was a lot of activity which needed lawyers to advise on.”
Looking at the present year, Patient said: “There is continued uncertainty…and I think that will cause those people who make investment decisions to pause and hold off making them while that uncertainty exists. However, with uncertainty comes complexity and where you have complexity it tends to lead to a need for high-level legal analysis of situations so I think there will be work to be done.”
While the performance of the top domestic firms remains impressive, hyper-profitable US firms have made inroads into the City market in recent years, hiring top partners away from the Magic Circle.
Kirkland & Ellis, the highest grossing law firm in the world, paid its average partner $5.03m (£4.1m) in 2018 while Latham & Watkins paid its average partner $3.45m.
Yesterday A&O said its merger talks with US firm O’Melveny & Myers had collapsed, with sources close to the firm blaming currency fluctuations that made it hard to come to terms.
A&O’s US push is based on the perceived need for the Magic Circle to establish credible US operations in order to remain global players.