Thursday, 6 August 2009

Use of PEP in an industry with fewer Equity Partners

Interesting article today in Legal Week about the falling numbers of Equity Partners in the face of increasing numbers of Partners in law firms.

This seems to suggest that most of the top 25 firms (this research was confined to the UK top 25 firms) are keen to spread the pain amongst a smaller number - presumably in the hope of spreading the upside equally amongst fewer Partners. Given this decision, it is hardly surprising that PEP figures are falling dramatically. This action does seem to be a deliberate policy - deliberate if not written.

It would seem that Partners' believe that the pain now is worth it and see no need to share later gain any wider than possible. The Magic Circle firms are bucking this trend - perhaps professional measurement is advising these firms to spread their equity base...

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