Partner pay breaks the £200,000 barrier

The average annual earnings for law firm partners in the UK has broken through the £200,000 barrier for the first time.

The new data, gathered from HMRC records, reveals that average earnings across both equity and fixed share partners reached £201,000 last year, which is up 7% compared to the previous year (£187,000),

While earnings took a big hit from the recession, the data shows that lawyers have now more than made up for lost ground with partner pay increasing by 35 per cent compared to five years ago, when it averaged £149,000. 

Partner profits have been helped by law firms being careful not to create too many new partners. Analysing the data, chartered accountants and business advisers Hazlewoods found that in the five years up until June 2018, UK law firms only created a net 94 new partners in total.

Meanwhile, there has been a move to greater automation and the outsourcing of labour-intensive tasks, which frees up fee-earners to take on more premium work with high hourly rates.

Hazlewoods partner Andy Harris said: “UK law firms learned a lot of lessons from the last recession. They run much tighter ships and are more efficient at converting hours worked into bills which are paid.

“Expensive new office overheads are taken on with more care and diversification efforts that fail aren’t allowed to run at a loss for too long."