News

Magic circle money mayhem! Average partner earnings at Allen & Overy and Freshfields edge towards £2 million

By on
24

Eye-watering sums put MoneyLaw junior lawyer pay war in the shade

Profit per equity partner (PEP) at Allen & Overy and Freshfields has risen to respective figures of £1.64 million and £1.73 million — up 4% and 12% — as the magic circle radiates Big Dick Energy.

By way of context, that’s roughly 12 TIMES what a newly qualified (NQ) associate earning the market-leading £143,000 MoneyLaw salary is being paid by top US law firms in London.

The lesson to rookie corporate lawyers from this differential: don’t waste time squabbling about NQ pay — which our Firms Most List shows to stand at between £78,500-£87,300 in the magic circle — just get your head down and concentrate on making partner.

The PEP rises at the magic circle duo come up the back of overall revenue rises of 4% at A&O to £1.57 billion and 5% at Freshfields to £1.4 billion. Net income is also up at both firms — by 3% at A&O to £690 million and by 12% at Freshfields to £683 million.

A&O’s slower growth comes on back of its magic circle-leading performance last year, while Freshfields’ chunky increases show that the firm is back on track following a slightly disappointing previous 12 months.

The 2018 Legal Cheek Firms Most List

Commenting on the results, A&O global managing partner Andrew Ballheimer said:

“We have had a busy year across our network and it’s gratifying to see another strong increase in revenue after outstanding figures last year. These results speak to a powerful client proposition, underpinned by the calibre and hard work of our people and a compelling international platform.”

Meanwhile, Freshfields chief Stephan Eilers commented:

“We have positioned ourselves effectively to take advantage of growth areas and we have a very strong team of professionals delivering exceptional outcomes for our clients.”

The newly released financials follow the publication of Clifford Chance’s results earlier this week. At CC PEP soared by 16% to hit £1.6 million, while revenue rose to £1.62 billion.

Expect Linklaters to announce shortly. The remaining magic circle firm, Slaughter and May, does not disclose its results, but it is understood to be the most profitable of the quintet.

For all the latest commercial awareness info, and advance notification of Legal Cheek's careers events:

Sign up to the Legal Cheek Hub

24 Comments

Anonymous

Brothers!

Sisters!

We need to tax this greed!

The NHS and legal aid are desperately underfunded!

Just think how many nurses a supertax of 85% could pay for!

VOTE CORBYN, FOR THE MANY, NOT THE FEW!!

(6)(61)

Anonymous

Corbyn is socialist fool.

Anyone that follows him is the same.

(23)(2)

Hmm

Ain’t nobody worried about no tired looking, Jeremy Corbyn.

A&O and Freshfields partner’s too busy getting to the money.

(3)(1)

Anonymous

ABOLISH ICE
ABOLISH CASH BAIL
ABOLLISH BORDERS
ABOLISH PROFITS

(1)(4)

Anonymous

How will I have a cold drink if we abolish ice?

(8)(0)

Anonymous

Liquid nitrogen

(0)(1)

TaxMan

How many nurses etc are already funded by the tax paid on these earnings?

If the combined Magic Circle profits are, say £3bn then the Treasury gets almost £1.5bn just from the equity partners. Add to that the tax and NIC (~2% employee and 13.8% employer contributions) from the lawyers working for the magic circle in the U.K. (est. 12,000 with average earnings of £150k and average tax & NICs of 60%) and that is another £1bn to the exchequer.

Statistics have proved that there was less tax paid to the Treasury when tax rates were 50% than when they reduced to 45%.

The higher the tax rate, the greater the incentive to minimise the tax paid.

(2)(1)

Anonymous

AND NO SALARY INCREASE???

(34)(1)

Anonymous

What a stupid comparison to make between PEP in magic circle and NQ in US Big law. PEP in US Big Law again doubles magic circle PEP quite often. You can if very talented make partner at Big Law as quick or quicker than you can at magic circle given popular up or out culture.

(24)(1)

Anonymous

Stop trying to make “moneylaw” happen. It’s not going to happen!

Now that KK has gone staff costs will be down (delta of 10k at least). Has it been a bumper year for you, Alex? I’ve noticed your name on the header of more articles recently. I’ve noticed you a lot.

(20)(3)

Anonymous

Agreed.

It’s basically racism to recruit to fill KK’s vacant job – Aishah Hussain ought to be promoted to be ge full-time Legal Cheek frontwoman, but Alex won’t do this because it will send the wrong message to law firms

Racism basically

(2)(5)

Anonymous

You sound like a pretty savvy pair who know how the world really works.

(10)(0)

Name (optional)

Posting “WOW LOOK AT HOW MUCH MONEY THIS WELL-ESTABLISHED INTERNATIONAL LAW FIRM MAKES!!!” or “OMGGGG JONES WATKINS DERINGER WILL PAY YOU £160K A YEAR TO NEVER GO ON HOLIDAY EVER AGAIN!?!?” multiple times a week is just not good journalism. I hate to say it but I prefer the Love Island drivel to this boring attempt at covering what is essentially not news in the first place.

I’m surprised you haven’t developed a standard template for these sorts of articles, Alex.

(11)(7)

Anonymous

He has developed a template. Moneylaw guff guff bagged guff guff eye watering guff guff

(13)(1)

Anonymous

Far more BDE at US firms that the magic circle.

(0)(0)

Anonymous

You are an idiot.

(0)(0)

Anonymous

“just get your head down and concentrate on making partner” – oh yeah great advice “Legal Cheek” you absolute idiots.

(24)(1)

Anonymous

Is this mob on the take from the MC? Seriously

(4)(0)

Anonymous

Just get your head down and concentrate on moving out of your parents garage, Alex.

(12)(3)

Anonymous

WTF? Get some help.

(2)(0)

Anonymous

Who’s Alex?

(0)(0)

Anonymous

This handle isn’t funny

(1)(0)

Anonymous

Lols 12 times what an NQ at US earns…..24 times what an NQ at MC earns. Jokes on who?

(12)(1)

Anonymous

OK, as no one has brought it up yet, I will. Did LC staff really try to bring in “Big Dick Energy” to the discussion? As someone who spent the better part of a decade in social sciences academia before the switch to law, I weep for the future.

(2)(0)

Comments are closed.

Related Stories