News

Top firms release their full year financial results and profits per equity partner continue to rise across the board

By on
14

Gravy train continues on merry way but will Brexit prove to be a buffer?

Lead1

There has been a flurry of financial results issued by City law firms over the last few days and, as expected, they make for deeply satisfying reading for anyone lucky enough to be an equity partner in one of the following outfits. In descending order they show the following profits per equity partner (PEPS):

Cash

Whichever way you cut it quite a few lawyers are about to be handed out some significant chunks of change.

Exactly how much, however, depends on what lies behind the figures as Richard Tromans, a strategy consultant for law firms, explains:

The actual payments to each equity partner can vary widely. The starting figure is all the pure beautiful profit that is left after all salaries and operational costs have been paid. This will then be divided between the equity partners with most firms combining a points system with some performance element. The latter being determined by a remuneration committee who, rather like the Treasury, hold the purse strings.

Law firms traditionally divvy up the whole pot rather than saving for a rainy day and make several payments to their partners during the year and then a big chunk at the end comprising anything owing and bonuses. A reward which can on occasion be so dizzyingly large as to go their heads. Tromans says:

There are stories of partners in the past having blown an instalment in just a week or so, then having to scrimp until the next instalment of their profit share.

But they are a very small minority with the vast majority trousering substantial sums year after year. And if you happen to be in the inner circle of the magic circle that can be a seven figure PEP for, say, a couple of decades which adds up to career earnings of a cool £20 million.

Even all the current uncertainty is unlikely to derail the gravy train. As Tromans explains:

If you look at the last period of financial crisis the top firms’ PEPs may have been flat or even dropped a bit but they were still taking home over a £1 million.

Crisis? What crisis?

14 Comments

A&O Equity Partner

Mega lol at Pinsents, cute PEP there bruv.

(16)(0)

Mason's Pinsent

Dat feeling when even a shop like Nabarro beats you at PEP…

#poorpinsents

(8)(0)

Anonymous

The Nabarro figure is surprising. But perhaps they have a correspondingly lower number of equity partners than Pinsents?

(0)(0)

Trumpenführer

Fool, didn’t you hear? LC called Nabarro a top firm so it must be true.

(4)(0)

Legal Aid Lawyer

Have I wasted my life?

Answers on a postcard, please. My leccy key is about to run out.

(0)(1)

Creepy Partner

This post has been removed because it breached Legal Cheek’s comments policy.

(2)(0)

Ano

This post has been removed because it breached Legal Cheek’s comments policy.

(0)(0)

Irwin Mitchell's own Igor

Hey, what’s so bad about moist trainee poon? Everyone luvs it

(2)(1)

Creepier by Far

To paraphrase an old “cheesy” slogan:

“Trainees will do anything for the taste of a T.C!”

Shiny sixpence to the clever boy or girl who can tell me what advert that’s from!

(1)(0)

Anonymous

About time for salary raises then AO?

(0)(0)

78k is pitiful, we need 100k

JONES DAY NEEDS TO RAISE SALARIES! I RAN OUT OF MONEY TO BUY COKE AND MOLLY GODDAMMIT

(2)(0)

Anonymous

Jones day seems to have an aura of unsurpased ladness. Clearly a fun place to work.

(3)(0)

Charles

BEST IN THE CITY BRAH. ALL I DO EVERYDAY IS COMMENT ON LEGAL CHEEK IN CAPS LOCK AND THEN GO HAVE A NICE FAP IN THE GENTS ROOM.

They even pay me £78k a year for that. Pretty sweet deal if you ask me.

(2)(0)

Anonymous

Unsurpassed*

(0)(0)

Comments are closed.