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Law firm's partners see their pay cut by third ... to nearly £1m
Jonathan Prynn, Consumer Affairs Editor16.01.09
PARTNERS of a top City law firm will take up to a third less pay this year - but each will still receive nearly £1million.
Senior lawyers at Clifford Chance, one of the "magic circle" of biggest London partnerships, will have to make do with an average of £900,000, down from £1.32million last year. The move is expected to be followed by other leading firms such as Freshfields, Allen & Overy, Slaughter & May and Linklaters.
The reductions in pay come ahead of what will be the worst City bank bonus season since 2001 with thousands of employees getting cuts of up to 75per cent or in many cases a "doughnut" or zero award. The major law firms have been hit by a fall-off in fees from mergers and acquisitions deals and from banking and private equity clients. Although some areas such as litigation have done better it has not made up the shortfall, according to legal experts.
Clifford Chance partners have been told to brace themselves for much lower earnings this year. Global managing partner David Childs told The Lawyer magazine: "We give partners guidance from time to time and have said to them that profit per equity partner would be significantly down on last year."
A fall below the £1million mark is hugely significant, according to The Lawyer's editor Catrin Griffiths. "One million pounds is a totemic figure because it means they're on the Wall Street level. It is part of their branding. To be in the global band they have to be super profitable," she said.
Last year an estimated 1,500 lawyers in London earned £1million or more after a surge in income over the past five years. This has given them spending power that ranks alongside the investment banking industry, contributing to the surge in property values and other indicators of wealth in the capital such as expensive restaurant openings.
The best paid partners were at Slaughter & May with an average profit per top partner of £2.25 million. Since 2004 the average for the magic circle firms as a whole has risen by two thirds.
Most London lawyers are now expecting this to be the leanest year at least since the aftermath of the dotcom collapse and the 9/11 attacks in 2001.
Clifford Chance revealed this week that it is making about 80 lawyers below partner level redundant. The managing partner at one mid-sized London firm said: "It's going to be absolutely awful."
Reader views (12)
Mark as a law student myself I find your statement to be extremely foolish. People in such jobs have worked to get there, they have worked hard from a young age, as have I, and have continued to do so. If anything it would be unfair if they were not rewarded in such a way.
- Richard, London, UK
Ahhhhh - envy. Sad.
- Rogan, Irving
Chrissie may never have met a poor solicitor but I have never met one I would recommend to anybody else.
- Roger Slade, Winchester, Hampshire, England
Sandy, why would they need so much money if they can't ever get to spend it?
I'm sure no one would disagree that footballers wages at premier level are disgusting, just like I'm sure that the lawyers who earn this much money deal with big business law firms and enjoy the perks often given by big corperations. I would also wager that the majority of lawyers in this pay bracket work harder and longer than nurses, paramedics, firecrew, police, social workers etc who earn a fraction of this.
This country does like people to succeed, it just isn't a fan of the greedy people moaning (when they get the time to do so of course) when there is so much poverty and destruction, (I'm sure your lawyer friend though would be able to help them though).
- S-M Hearmon, London, UK
Bless your friends Sally, they nearly work the same amount of time as a police officer or a nurse, etc etc but for a huge salary. No tears from me, they have milked a system and if the kitchens too hot for them get out of it.
By the way, footballers pay is pitiful as well.
- Roger, Surrey
Never met a poor solicitor !!!
- Chrissie, London
Totally agree with Sandy. My wife is a City lawyer. She spent many years qualifying in two jurisdictions, speaks three languages and has three degrees. She has worked stupendous hours and often has to work all night. The constant pressure means that she routinely deals with e-mails and such even when we are on holiday. If a typical dim-witted football player who is incapable of winning anything is not begrudged his income I'm not sure why a lawyer generating many times his or her salary in fees should be. People forget who actually pays the bulk of taxes in this country....
- Mark, London
I would like to welcome them to the real world - but they are still a long way off!
- Deborah, Londons
No doubt all the jealous, small minded people in the capital will be making snidey smug little comments; in fact Wills and Ethan Edwards have begun already. However, it doesn't matter whether you earn ten thousand pounds a year or ten million pounds a year; a cut of 25% in your income hurts.
But that isn't the point of the story, the point is that if the high wage earners are suffering then the low wage earners will suffer worse; so how smug are you all now?
- Casper Slides, France at the moment
A friend of mine is a lawyer, the type referenced in this article. It doesn't matter what they get paid they have no time to spend it, working on average 16 hours a day 6 days a week (see tragic suicide story earlier this week). Again this underlines the petty minded nature of this country and why their is no incentive to succeed. I don't hear anyone complaining the wages of uneducated footballers, working upton 270 minutes a week for £150k!
- Sandy, London
Poor lambs, how will they cope. Perhaps a taxpayer funded compo scheme? Maybe we could all have a whipround for them.
I'll get the whip......
- Ethan Edwards, UK
it's a good start !
- Wills, Soton
