Solicitors' annual earnings soar to £10bn record

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The Independent Online

Solicitor's earnings hit a record £10bn high last year, with the profession enjoying boom times not seen since the mid-1980s, according to the Law Society.

Solicitor's earnings hit a record £10bn high last year, with the profession enjoying boom times not seen since the mid-1980s, according to the Law Society.

A typical partner in one of Britain's top 123 law firms now earns £167,000 a year. In the past five years, gross fees generated by solicitors as a whole have risen by almost half. The Law Society's annual statistical report also shows that £1.4bn of solicitors' total income, from fees submitted in accounts last year, was paid from the legal aid budget.

There are now more solicitors than ever before, with numbers having reached 83,000, an increase of almost 60,000 since 1970. At the top end of the profession, record fees paid to lawyers reflect a growth in the number of merger and acquisition deals, where British and foreign-based businesses use big City law firms. The success of public-private partnership deals in the transport and healthcare sectors has also provided a new source of income for many commercial lawyers. Most expect this to continue beyond the next election because Labour and the Conservatives have committed to continue with the Private Finance Initiative.

Competition for the very best lawyers in the City has led to spiralling salaries for even the most junior solicitors.

For a small number of newly qualified lawyers, pay packets have reached six figures. According to a recent survey by the legal recruitment consultants, Taylor Root, some American law firms based in London are offering their new recruits £100,000 pay packets, which come with bonuses that add more than £20,000 a year.

The top UK law firms pay their newly qualified lawyers, who have successfully completed their training contracts, half as much, but it still means a 23-year-old receives £50,000 a year. When they get to partner level the Law Society report shows that these high-flyers are making £260,000 in profit a year for their firms.

A sizeable proportion, £748m, of the annual income generated by solicitors and barristers is paid by foreign clients, the survey says.

The most high-profile case to date is a dispute between the millionaire and world-famous art collector, Baron Hans Heinrich Thyssen-Bornemisza, who has been suing his eldest son Georg, or "Heini Junior", over a fortune worth almost £2bn in the Supreme Court in Bermuda. Dozens of British lawyers have been working on the case, which is already estimated to have cost £70m.

In April the judge hearing the case resigned after a pay and conditions dispute with the Bermuda government.

Now the Lord Chancellor, Lord Irvine of Lairg, has been asked by the Bermudan authorities to release a High Court judge to hear out the remainder of the case, which has been running for two years.

Yesterday a spokesman for the Lord Chancellor's Department said that talks were still going on but was quick to stress that all costs would be met by the Bermudan government.

In England and Wales, Lord Irvine has pledged to reduce the legal aid budget by abolishing state aid in most money claims so that people pay for lawyers on a "no win, no fee" basis. But a recent study by the University of Westminster showed that some solicitors were overcharging clients by exaggerating the chance of losing the case so they could justify bigger bills.

* Members of the public are rushing to volunteer to help the Law Society manage its affairs, which have been characterised by political in-fighting in recent years. An advert placed in national newspapers has prompted more than 1,200 people to apply to become the first "lay members" of the Law Society's ruling body.