Ben Thomson, LawFuel contributing editor
The 150-year-old City firm just posted profitability numbers that will make some London big law partners wince, but the strategy is deceptively simple.
While the Magic Circle firms continue their global expansion arms race, adding offices in places most partners couldn’t find on a map, Macfarlanes has been quietly doing something almost heretical in modern BigLaw: staying focused, staying small, and getting spectacularly rich in the process.
It is also about to enter LawFuel’s Power List of the world’s top law firms.
The firm’s latest results reveal average profit per equity partner has hit a record £3.1 million, smashing through the £3m barrier for the first time and comfortably outpacing Linklaters (£2.2m), Clifford Chance, and A&O Shearman, all of whom hover around the £2m mark. Revenue climbed 10.1% to £371.4m, with operating profit up 8.8% to £206.5m.
The highest-paid partner? North of £5 million.
For a firm with just 97 equity partners and around 380 other lawyers, those numbers are eye-watering, as well as instructive.
The Anti-Sprawl Strategy
Macfarlanes has essentially inverted the conventional BigLaw wisdom. Instead of chasing scale, it chased depth – building market-leading positions in private equity, private wealth, funds, and tax, all anchored in English law.
The firm maintains a modest Brussels office and recently added a New York representative outpost, but that’s about it for the global footprint. Its “international alliance of the unaligned” referral network lets it service cross-border work without the overhead of 40-office empires that require partners in São Paulo to subsidise partners in Singapore.
The result has been profit margins north of 55%, which is true elite territory.
Riding The Private Capital Wave
Founded in 1875 as a classic British private-client practice serving the landed gentry, Macfarlanes spotted the private capital opportunity decades before it became a stampede. As US firms flooded London driving rate escalation across PE and funds work, Macfarlanes was already embedded with the clients who mattered – the sponsors, the family offices, the HNWIs structuring wealth across jurisdictions.
That first-mover advantage has compounded. Chambers UK and Legal 500 consistently rank the firm at Band 1 for private equity buyouts, investment funds, tax, corporate M&A, and private wealth. The work isn’t commoditised public-company mandates – it’s complex, relationship-driven, and priced accordingly.
Leadership Transition – And The Precipice
Incoming senior partner Damien Crossley, (pictured) a leading tax practitioner who takes over from Sebastian Prichard Jones this month, has been credited with pushing the tax practice toward more creative, high-margin work. It’s a move that helped lift overall earnings and sealed his elevation to the top job.
But Crossley himself has acknowledged the double-edged nature of the firm’s position. In a recent FT profile, he captured it neatly: “We are walking along a higher and narrower precipice.”
The rewards are obvious. So is the target on the firm’s back. US practices with London outposts are circling, and Macfarlanes’ tight-knit culture and relatively small equity pool make retention a live concern. When you’re paying partners £3m on average, someone will always offer £3.5m.
What The Rest Of BigLaw Should Learn
Macfarlanes’ success, alongside peers like Travers Smith, demonstrates that the “scale at all costs” model isn’t the only path to prosperity. For firms willing to stay disciplined about practice mix and resist the gravitational pull of global sprawl, the economics can actually be better than the megafirm alternative.
The Macfarlanes strategy isn’t complicated, demonstrating that record results are a reminder that in a market obsessed with growth, focus can still win.
- Own your niche – be genuinely the best at something clients will pay premium rates for
- Avoid overhead creep – expensive international offices that don’t justify themselves are margin killers
- Invest in relationships – decades of PE and family office connections don’t materialise overnight
- Be patient – this strategy took 150 years to perfect
The harder question is whether it can be replicated, or whether Macfarlanes represents a historical accident that today’s lateral-obsessed market could never recreate. Whether rivals can replicate the model – or simply poach its partners – remains the open question heading into FY26.
Either way, when a firm founded to serve Victorian landowners is now beating Magic Circle profitability, the conventional wisdom deserves a second look.
