Linklaters partner profits jump 10% to £1.77 million ‘despite the uncertain backdrop of the last year’

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Pre-tax profits up too

Magic circle law firm Linklaters has gone public with its latest financial results, with partner and pre-tax profits enjoying sizeable uplifts “despite the uncertain backdrop of the last year”.

Links confirmed profit per equity partner (PEP) rose 9.9% to £1.77 million while pre-tax profits hit £815.3 million — an increase of 12.2% on the previous year. But revenue growth was somewhat muted, rising a little over 2% to £1,673.9 million.

“Despite the uncertain backdrop of the last year, we are pleased to report a very strong set of financial results,” Paul Lewis, Linklaters’ firmwide managing partner, said. “Our results are testament to the hard work and excellent performance of our people over that period, especially given its unique challenges. Our global capabilities and enduring client relationships also came to the fore as clients turned to us to help them to navigate the myriad issues arising from the pandemic.”

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The firm said it did not use government financial support packages during the pandemic and resultant lockdowns. It did, however, cut newly qualified lawyer pay to £90,000 in the summer of last year before re-upping it in April to £92,500 plus a discretionary performance bonus. Links has since gone on to up base rates to £100k following similar moves by some of its elite UK-headquartered rivals.

Lewis continued:

“The world is evolving at pace, catalysed by the effects of the pandemic. Climate, technology and data are just some of the globe-spanning topics that will define the next decade and beyond. Leading businesses need advice from a leading global law firm, capable of providing top quality service consistently across multiple jurisdictions. We are committed to ensuring that Linklaters continues to be that firm.”

Elsewhere, Allen & Overy and Clifford Chance recorded PEP results of £1.9 million and £1.85 million, while Freshfields reported a figure of £1.91 million. Slaughter and May chooses not to disclose its financials.

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I’ll play.

Not that any of this matters, but it’s interesting that only a few years ago Links had the highest PEP of the Magic Circle. Now at £1.77m they’re noticeably behind CC (£1.85m), A&O (£1.9m) and FBD (£1.91m).

Interesting too that despite the fall in the dollar, the major US firms are still orders of magnitude ahead (e.g. L&W at £3.27m, STB at £3.79m and K&E at £4.48m). You have to go well down the rankings to find US firms on par with the Magic Circle (e.g. Dechert at £2.05m and McDermott at £1.83m).

Also interesting that Slaughters’ Wikipedia page claims a £3.1m PEP, yet they can’t bring themselves to pay associates as much as the other Magic Circle firms, let alone the US firms which have similar profitability (e.g. Gibson at £2.99m, Skadden at £3.12m or Milbank at £3.25m). Something isn’t right there!



The real money from legal fees is in America. UK firms will never succeed there and can’t compete with pay as a result even in their home markets.



Slaughters, for whatever reason, seems to still be able to attract talent.

Now sitting on the client side, and using 4 of those firms you mention, what stands out to me about using Slaughters is it feels very partner led. They’re an irritating firm in too many ways to mention, but you do feel you’re getting the guy/girl who’s listed in Chambers running your deal and it shows in the quality of telephone advice in particular compared to other MC firms and US firms (with the latter generally having better senior associates).

It might be that Slaughters partners are just machines, but it seems likely they operate a lower partner:associate ratio than competitors to make that service work. If so, that presumably means the big, golden £3m carrot seems a lot more attainable, which will help retention associates at 4 PQE onwards.

So outside looking in, it seems Slaughters probably retains a USP both to clients (partner led work) and associates (less negligible chances of equity).

I’d be more worried if I were another MC firms, who basically run the same model as the US firms but not as well (either work quality or profitability). The only one trying to do anything different to be fair, is FBD (and having worked there, I struggle to be fair to the psychos running it) with its meaningful push over in the US following the Klingsberg hire. The others seem to lack ideas to be honest.


Ex-SM Now BCLP Assoc

Right – SM attracts but it sure doesn’t retain. Look at the recent news on trainee retention rates and also clock that many of the specialist and even financing departments will have been, by Q4 this year, utterly ransacked from 1 – 4 PQE level.

From my perspective (and I can assure you a lot of ex-colleagues thought the same), this is primarily due to their horrific pay policy over lockdown coupled with a complete failure to pay attention to associate cap management. The partners have got their head in the clouds, and all the catch-up they are trying to play now is too little too late.



Sounds like you downgraded to me.



To compare the profit per equity partner numbers you also need to look at how many equity partners there are. Links has very few salaried partners so a lot of people are getting £1.77M.



The leverage ratio (equity partners vs non-equity partners and associates) are substantially the same between the Magic Circle and the US firms.

Indeed, according to the Legal Business global 100 table, 17.0% of all lawyers at K&E are share (equity) partners and 15.9% of all lawyers at Linklaters are equity partners.



Kind of bizzare that this comment has been downvoted…

Rather than listen to what UK firms tell you about your “higher chances” of equity, why don’t we actually look at the numbers. Here they are:

Firm / percentage of lawyers who are full equity partners

Goodwin Procter / 21.08%
Milbank / 20.65%
Ropes & Gray / 20.53%
Sullivan & Cromwell / 20.27%
Fried, Frank / 20.23%
Skadden, Arps / 19.64%
Akin Gump / 19.50%
Paul Hastings / 19.50%
Simpson Thacher / 19.22%
Quinn Emanuel / 19.18%
Debevoise & Plimpton / 18.98%
Latham & Watkins / 18.98%
Vinson & Elkins / 18.90%
Kirkland & Ellis / 18.49%
Davis Polk / 17.08%
Sidley Austin / 17.06%
Shearman & Sterling / 16.91%
Linklaters / 16.41%
Dechert / 16.39%
Cleary Gottlieb / 16.31%
Weil, Gotshal / 16.29%
Freshfields / 16.16%
White & Case / 15.90%
Slaughter and May / 15.90%
Ashurst / 15.49%
Allen & Overy / 14.97%
Clifford Chance / 14.92%
Herbert Smith Freehills / 14.79%
Pinsent Masons / 14.54%



Where are those figures from, please?


Very interesting – source please. Also, taking out the US firms (which on your numbers do look better), it is interesting in the context of this article that Linklaters has a higher ratio of equity partners to lawyers than the other magic circle firm albeit they are not massive differences.


They don’t all get 1.77m even at equity. There’s a lockstep scale based on seniority that starts just shy of 1m and goes above 2 for those who are senior.



Yep, I know mate – the point I was trying to make was that at Links there aren’t many £300k salary partners knocking about.



About 30% of CC and A&O partners are non-equity, whereas LL and FF are essentially 100% equity partnerships. Guessing the very small number of non-equity partners you sometimes see listed for FF and LL are probably not counted as equity partners for tax or regulatory reasons in their jurisdictions (or perhaps because they are retired “partner consultants” or something) as there is no general rung of non-equity partners at either. Implies LL and FF are significantly more profitable when you don’t have non-equity partners massaging the numbers.



It’s profit per equity partner not profit per partner, so number of salary partner’s isn’t really the issue. The number you should look at is the number of Equity Partners in each firm and ratio of equity partners to associates.


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