UK law firm Freshfields has forced out partners and downgraded the equity share of others after a shake-up of pay at the “magic circle” law firm in an effort to drive growth.
The firm has culled equity partners in recent weeks, according to people with knowledge of the situation. The cuts come after the firm overhauled its remuneration structure late last year, which had led to dozens of its roughly 500 partners being handed fewer equity points, the people said.
Offices in Germany, Paris and London had all been subject to partner exits and equity downgrades, the people said.
Freshfields introduced a more performance-based compensation system at the end of 2025 that gives it greater flexibility to increase pay to help hire and retain top lawyers.
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Under the old structure, which ran to 40 points for most partners but allowed some to reach 100, the firm gave more credit to tenure, the people said. Each point was worth about £70,000 (€82,000) last year, according to two people with knowledge of the system.
Law firm partners are usually allocated equity points annually, which determines their pay. The value of points fluctuates based on a firm’s profitability in any given year.
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The changes come as Freshfields has made an aggressive push to grow in the US in recent years, after decades of UK firms attempting to break into New York’s elite with limited success. While the firm has gained some ground in America, partners in Europe have had to support hiring in a market where top partners can command more than $20 million (€17.5 million) a year.
While most top law firms manage their partnerships annually to maintain profitability, the new compensation structure had led to bigger changes at the firm this year, the people said.
Partners at a number of rival firms told the FT that they had received approaches from Freshfields lawyers looking for jobs in recent months. They included lawyers who were unsettled by the changes as well as those seemingly pushed out, the rival partners added.
Freshfields declined to comment on the partner changes.
Freshfields, which is part of the so-called magic circle grouping of elite London-based firms, stopped voluntarily reporting its financial results in 2023 when its average profit per equity partner (PEP) was £2.09 million. PEP was estimated at $2.9 million in 2024, according to the most recent Law.com rankings.
The firm has also added a non-equity tier to its partnership for the first time this year, a model that is increasingly being adopted by US firms as a way to retain younger lawyers with the partner title without diluting the equity.
Almost all top law firms have moved away from a more traditional lockstep pay model — where partners automatically move up the equity ladder each year — with Slaughter and May the only remaining elite firm in the UK market still to run such a structure.
Debevoise & Plimpton, one of the last US law firms to operate a lockstep model, said in May that it was introducing a bonus pool to give it more flexibility to retain and hire partners. The firm also added a non-equity tier to its partnership last year. - Copyright The Financial Times Limited 2026
