But 16 hours a day for six days is the cost . .
The Times has usefully broken down the money being made by London’s Big Law firms as they reported on the celebrations of Clifford Chance partners’ for the first-time-ever, shattering the £2 million pound barrier in yearly earnings.
Not that the celebrations were coming from the Canary Wharf HQ of the megafirm because the partners were largely taking big-earned breaks from a money-go-round of M&A and Stock Exchange floats to retreat with the Bollinger boxes to the Med or the Cotswold’s.
And even the Clifford Chance earnings will not be the highest among London lawyers. Slaughter & May, who keep their money matters private, will eclipse those earnings. The other Magic Circle firms will hardly be lagging in the pay stakes either.
Allen & Overy has just paid out an average of £1.9 million to its partners, The Times reports, while Freshfields is about to announce a CC-sized earning this week too.
The Big Law money in London has been the stuff of headlines for some time, with some of the bounty going to Associates where pay rates continue to soar, as per the Big Law salary scale we reported here.
2021 saw 60,000 takeovers valued at over $5 trillion around the world, and $601 billion raised in stock market flotations, providing major meal tickets for the Big Law firms, including the London lawyers who are reaping the rich rewards provided by the deal flow.
The profits is not just the Magic Circle firms however with smaller firms like Ashurst’s who have produced profit per equity partner (PEP) increases to £1.2 million in the 2021-22 financial year while Herbert Smith Freehills jumping 6 per cent to £1.16 million.
And the pay for first year associates, quite apart from those in subsequent years, has increased to a staggering £175,000. Much of the rush for talent and the associated salaries and bonuses has been driven from the large US firms in London, whose ‘Cravath Scale’ Big Law pay has driven the rates into the upper atmosphere.
Akin Gump, the US-based firm, recently adjusted it pay rate with an exchange rate adjustment, but other London law firms paying big money include Goodwin Procter, Davis Polk, Gibson Dun and Weil Gotshal, who are all now paying over £160,000.
The work stress and hours however are also taking their toll as firms deal with the pressure of retaining lawyers to work those long hours.
Nick Crasner, the founding partner of Crasner Consulting, a consultancy that advises law firms on recruitment and strategy issues, said top partners will be billing around 50 hours a week (2400 a year) but many top partners will double the billable hours with other work. “A 16-hour day, six days a week, is not uncommon,” he said.
It’s all a case of long hours = big money. Making hay while the London deal sun shines.