Despite the recession causing a fall in the combined billing fees of the UK's 100 biggest law firms for the first time in nearly 20 years, top lawyers are earning more than ever.
The total revenues generated by UK law firms – including the City's "magic circle" of Allen & Overy, Clifford Chance, Freshfields Bruckhaus Deringer, Linklaters, and Slaughter and May – dropped 4 per cent to £14.18bn for the year to the end of March, according to Legal Business magazine. It was the first fall in the survey's 19 years.
While revenues fell at the firms, the average equity partners' profits – the net income divided by the number of such partners – jumped by 12 per cent. Richard Lloyd, the editor of Legal Business, attributed this uplift to "some ruthless cost-cutting". The 100 law firms surveyed axed 1,329 lawyers to 47,725 at the end of March.
Mr Lloyd said: "Almost two-thirds of the 100 law firms in our survey posted an increase in profits per equity partner, yet less than half of them achieved growth in revenue. The redundancy rounds of the past two years and cuts to discretionary spend have served equity partners well."
Partners at the "magic circle" firms continue to have the highest-earning partners, but those at the smaller London and national companies enjoyed the biggest rise. For instance, Shoosmiths reported an 82 per cent rise in profits per equity partner, despite a 9 per cent fall in revenues.
Nigel Boardman, the partner specialising in mergers and acquisitions at Slaughter and May, was the top earner last year, with £2.31m. Alastair Dickson, a senior partner at Dickson Minto, came second with earnings of £1.92m.