UK law firms add 307 net new partners as legal sector grows despite economic uncertainty
UK law firms added 307 net new partners last year as the legal sector continued to grow despite economic and political uncertainty.
Figures from the Solicitors Regulation Authority showed that 4,594 lawyers were promoted to the top ranks of law firms, while 4,287 retired or left in 2017/18.
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The number of new partners has risen sharply from just 17 in the previous year, according to analysis by business advisers Hazlewoods.
Over the same period the UK’s top 100 law firms generated record revenue of £24.1bn, a 10 per cent increase on the previous year.
“Strong revenue growth allows law firms to reward associates with a position in the partnership,” Hazlewoods partner Andy Harris said.
“Without a growth in profits existing partners are much more reluctant to dilute their own equity stake by adding to their ranks,” he added.
Last year was the fourth consecutive year of new partner growth.
In 2013/14 there was a net drop of 778 partners as changes to partnership tax rules made firms more reluctant to promote lawyers to a “salaried” partner position.
The new figures showed new partner growth despite concerns that milennials were snubbing a career in law.
“The financial rewards and the status that comes with a partnership position makes up for the notoriously long working hours that lawyers have to deliver on the way,” Harris said.
“It’s still seen as the pinnacle of a lawyer’s career,” he added.
An active recruitment market had also helped new partner growth, he said, with lawyers more likely to be offered or promised promotions in a bid by firms to retain staff.
Lawyers were handed another boost earlier this year as the sector with the biggest expected pay hike in 2019, according to a survey by recruiter Robert Walters.
It found that private practice lawyers could expect a six per cent rise, risk lawyers could net a 10 per cent rise, while those in compliance could be in for a 22 per cent hike.
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Ten UK-based law firms paid their partners an average of £1m or more in 2017, according to research published by Legal Week.
Magic circle firm Slaughter and May led the way with an estimated average profit per equity partner (Pep) of £2.7m, followed by City firm Macfarlanes with £1.74m.