Linklaters partner profits up 5% to £1.9 million

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Revenue is up too

Magic Circle law firm Linklaters has posted 6.5% growth in revenues in its latest financial results.

The firm recorded revenues of £1.78 billion whilst its profit per equity partner (PEP) increased 5% to £1.87 million.

According to Paul Lewis, Linklaters’ firmwide managing partner, this comes off the back of “increased revenues from robust markets and sustained deal activity over the past financial year”.

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Lewis added: “In a post pandemic world with growing political and economic uncertainty, our clients require complex legal solutions. The investments we have made over the year have ensured that we are able to provide the right combination of global coverage and high-quality cross practice expertise. To excel for our clients we need to be nimble, bold and decisive in our approach, which we will continue to be as we look ahead to the next financial year.”

Magic Circle revenue and PEP for financial year 21/22

1Clifford Chance (£1.97 billion)Freshfields (£2.07 million)
2Allen & Overy (£1.94 billion)Clifford Chance (£2.04 million)
3Linklaters (£1.78 billion)Allen & Overy (£1.95 million)
4Freshfields (£1.7 billion)Linklaters (£1.87 million)

This rounds off the Magic Circle’s financials for the year with Linklaters being the last of the group to report its results. Freshfields, Clifford Chance and Allen & Overy all recorded partner profits around the £2 million mark. Slaughter and May does not usually publish financial results.

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1 month ago: “[we recognise that] that our NQ salaries are below those of some our competitors, we do not believe that the right course of action is to rush into matching salaries at NQ level without properly considering the impact of any changes and the wider economic context”

Is “wider economic context” a synonym for PEP now?



I think it was always obvious that was the only thing they cared about. Lie after lie about pay while we’re being thanked and told business is still extremely busy.



PEP is from the last financial year (where there were multiple pay rises) and the pay freeze is about forward looking as we go into a recession. Very different metrics.



To be fair, retaining partners is more important to the business than retaining more NQs…



Hmm no coincidence that the two firms with bottom PEP are the ones refusing to increase associate pay


The math is mathing

Slaughters PEP last year was £3.5m (legal business) and yet their still stingy…



Slaughters would like everyone to think their PEP is £3.5m ….



A reminder that about 30% of the partnership at CC and A&O are non-equity whereas Links and FF are near 100% equity partnerships (presumably the very small numbers of non-equity ones are random partner consultants or people in jurisdictions where they can’t be equity partners for some reason). So CC and A&O’s PEP figures are distorted and not comparable to Links and FF.



A reminder that pep only takes into equity partners so not sure what your point is.



I think the point is that figures will look better for firms with more salaried partners as if those salaried partners were instead at the bottom of the equity partner chain it would have a large impact on PEP numbers



The point is that if all the “partners” at A&O and CC were equity partners like at Links and FF, A&O and CC’s PEP would be a lot lower. So it artificially flatters A&O and CC’s PEP when their underlying profitability is not actually as good as Links or (particularly) FF.

To illustrate the point. Per the FY22 financials Links’ profit was 49% of revenue, CC’s was 40% and A&O’s was 46%. But because CC’s and A&O’s PEP is distorted by non-equity partners you would get the impression from it that they are more profitable than Links.


Doubtful Dobbie

Last time I checked all four firms have a similar number of equity partners (350ish) and similar revenues. Your point is not invalid but the differences between FF/LL and A&O/CC simply aren’t that great.

Case in point: Legal Business had a table on profitability for various UK firms – I think that A&O/CC sat at 40% while FF/LL sat at 45%.



40% to 50% gross margin is a pretty big difference in a business of that size…


STB Associate

Meanwhile STB PEP is £8m+. Pay more to associates and they will die for you.



Neither of these points are correct


STB Associate

They are



They are not.

STB PEP is currently just shy of $6m. Look it up.



8m? There’s no way


STB counsel

Yes. Individual equity partner target is $10m.



So every level of journalistic reporting on the matter (Lawyer / FT) are incorrect and STB are kings of PEP? Surely if that was true it would be shouted from the rooftops. Also “Individual equity partner target”, is that not what you are targeting rather than actualised?



That’s got to be revenue, not profit, surely? If it’s profit then ain’t many of them hitting it!


Money Man

If you are an associate at A&O working for a below-market frozen salary then you are a cuck.


Cuck man

Good luck with the upcoming application cycle.



O yes another 2k when in a 63% tax bracket really changes lives


Out 'n Proud

Thanks for the input, fresher. Remind us which firms rejected you for their insight schemes?



Why is Linklaters still paying NQs £2k more than NRF then?



That’s 1200 more after tax given the 60% de facto rate after 100k losing personal allowance. That’s 100 more a month. And just one month of that additional earning could pay for a LinkedIn premium subscription for over 6 months. And that LinkedIn premium might help you liaise with a recruiter who will find you a better firm than either to get you out of that mudpit.



Isn’t inflation at almost 10% which means in real terms Links’ revenue and PEP went down?



Inflation isn’t uniform across all goods and services though, is it? If energy prices weren’t up 200% or whatever then a figure reflecting the true inflationary effect in the general service economy would be a lot lower.



Should’ve voted for Jeremy Corbyn…


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