The top US law firms are now paying their London partners significantly more than their British rivals, in another sign of American dominance in the UK legal sector. Partners in the London offices of the top 15 US law firms took away 25 percent higher payouts than their counterparts in the UK’s top 15 firms in 2022, new research from legal sector accountancy firm Hazlewoods shows.
Equity partners in the London offices of the 15 most profitable US law firms generated average profits of £1.23m, compared to average profits of just £985,000 in the UK’s top 15 firms, the research shows.
The higher partner payouts come as the result of US firms’ sharper focus on higher-margin M&A and private equity work, as well as their avoidance of low-margin areas such as employment law, the report said. By contrast, UK law firms ‘full spread’ models put them in a better position to weather any coming economic storm, by hedging their businesses by giving them a foothold in areas that might be boosted by a recession.
The research comes as US law firms have also continued to push up salaries for newly qualified (NQ) lawyers in London, despite warnings the current economic downturn could lead to a major slowdown in work.