The vast profits reflect law firms' ability to benefit from a growth in international company takeovers and mergers from their London and US-based offices. Commercial lawyers advising in the turbulent oil and gas markets have been among the most financially successful.
Linklaters, the law firm which enjoyed the biggest increase in earnings, saw its average profits per partner rise by 41 per cent to a total of £843,000. The London-based firm has 320 equity partners, most of whom earned £1m last year.
The world's biggest law firm, Clifford Chance, saw lawyer earnings rise by 30 per cent, with the average "wage" for its 371 equity partners approaching £900,000. The firm employs 3,300 lawyers in offices all over the world.
Research published in Legal Business magazine today reveals that 10 law firms, five British and five American, each bill more than $1bn (£575m) annually. Four years ago, Clifford Chance stood alone as the only $1bn law firm in the world.
The magazine notes that executive partners in the top half a dozen firms "are millionaires for whom the difference of £100,000 in average partner profits is no matter of life and death."
Legal Business research also shows that 2004-05 has been a good year for the Global 50 law firms with turnover increasing for all 50 firms. Profits per equity partner, the all-important figure for measuring law firms' financial performance, are also up for all but four of the global 50 firms.
Tom Freeman, the magazine's editor, said: "The amount of profits being shared among equity partners in the world's top law firms is absolutely vast. Profits regularly top £1m a partner.
"However, the rivalry among such individuals gets yet more intense. Once you get such high achieving law-firm partners doing similar work at fairly indistinguishable organisations, nothing is more galling than watching your arch rival take home a few hundred thousand more pounds than you."
The trend seems set to continue. A separate poll by the magazine Legal Week found that 92 per cent of lawyers who took part in the survey said that they expected fee income to rise over the next 12 months.Reuse content