Five-year figures show UK top 25 keeping tight rein on equity

The UK's top law firms have tightened their grip on the equity, increasing equity partner count by less than 4% despite a double digit increase in overall partner numbers over the last five years.

Legal Week research into partner headcount changes at the UK's largest 25 firms by revenue show that, on average, partner count grew by 16% from 2003-04 to 2008-09. However this comes against only a 3.7% increase in equity partner numbers.

With firms keeping a tight reign on their equity, full equity partners as a percentage of partnership size have dropped, falling from 68.6% in 2003-04 to 61.4% in 2008-09.

The magic circle has bucked the trend, with total partner count dropping marginally (0.36%), against an increase in equity partner numbers of just over 2%.

However, the figures are skewed by Linklaters, which has been consciously shifting towards an all-equity model, boosting its equity partner ranks by 24.5% against a slight dip in total partner numbers. Allen & Overy (A&O) has also grown its equity ranks significantly (18.6%), but this comes against a similar increase (15.4%) in total partner numbers.

The figures, which do not take into account high-profile partnership restructurings announced this year by firms such as Clifford Chance and A&O, show that five firms have scaled back their partnerships over the last five years.

Freshfields Bruckhaus Deringer, which carried out a major restructuring of its partnership two years ago, has seen the biggest drop, with partner count falling by 14.3%, followed by Hammonds at 13.7%. Eversheds and Denton Wilde Sapte also recorded marginal dips in partner headcount.

The same firms have also made significant cuts to their equity partner ranks, with Hammonds and Dentons reducing equity partner numbers by more than 20%.

Tony Williams (pictured), co-founder of consultancy Jomati, said: "We have seen a trend before the downturn of firms making greater use of non-equity, but in difficult times performance becomes a bigger issue. Non-equity partners will come under increased pressure now as they become an expensive proposition in downturns."

The figures also highlight those firms to have grown their partnerships significantly. Bird & Bird, which has ramped up significantly in recent years, has almost doubled its total partnership over the last five years, moving from 103 partners in 2003-04 to 202 partners in 2008-09, while firms including DLA Piper, Berwin Leighton Paisner, Ashurst and Pinsents have also grown significantly.

Ashurst senior partner Charlie Geffen commented: "The model we have followed of focused, high-quality organic growth has worked well for us. This is slower than merging, very different from chasing turnover and it has put us in a healthy position."

BLP managing partner Neville Eisenberg added: "This reflects the overall growth of the firm which picked up dramatically over the last four or five years. We have been actively hiring partners from other firms to strengthen practice areas in line with our overall strategy and develop new practice specialisms where the firm was not well represented. The market response to the quality improvement has been that we are getting bigger and better work."