And, for the record, the Global 100 (most recent listing).
This article also
provides background to how some of the UK firms rank as highly as they
do, and what’s behind their profitability strategies.
In a word, "leverage." UK firms in the Global 100 average
6.3 lawyers per equity partner, where the comparable figure for US firms
is 3.3:1. (And ten years ago the figure was about 2:1) Nevertheless,
in profits per partner, only 5 UK firms rank in the top 30, and the highest
sits at the inglorious post of #11.
More interesting is the speculation about what the future may hold in
terms of leverage. Key points:
- If the UK and the Continent at large value partner involvement less
than the US, higher leverage there makes sense. And if that changes,
so does the implication. - UK associates accept salaries approximately two-thirds of their US
contemporaries, for reasons that no snappy market analysis makes clear. The
article posits that the value of being able to "put Freshfields on
my resume" is worth something, but that’s grossly superficial. So
is the value of putting any US firm of equivalent caliber on your resume. Are
US firms overpaying? Are UK firms underpaying? Or is this
simply a case of the inordinately high "transaction costs" of shifting
associates from the UK to the US and vice-versa? (I vote for
Answer C.) - Commodity work invites high leverage, boutique work invites low leverage. Can
we state the obvious (yes, and we just did)?
Still, worth a read. Shearman & Sterling gets singled out for
bridging the pond most adroitly.
