Freshfields has axed European equity partners in recent weeks as part of a drive to improve its US growth prospects, the Financial Times has reported.
The firm's London headquarters and offices in Paris and Germany have all been subject to cuts, according to the FT, which follow the Magic Circle UK firm overhauling its pay structure late last year to create a more flexible, performance-based system intended to help it better attract and retain top talent.
The overhaul reportedly led to dozens of its approximately 500 partners receiving fewer equity points.
Freshfields also introduced a non-equity partner tier earlier this year, according to Law.com, bringing it closer to a model now virtually ubiquitous among the Big Law firms with which it is competing on its home turf and, increasingly, in the US. In recent years, the firm has been hiring aggressively in the US, where pay for top partners can now top $20m a year.
Freshfields' average profit per equity partner (PEP) stood at £2.09m in 2023, when it reported that it would no longer publish its financial performance outside what is required in company filings. Its PEP was estimated at $2.9mn in 2024, according to Law.com's most recent rankings.
Virtually all top law firms have discarded a full lockstep model in which partners' pay increases automatically based on tenure, 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 major US firms to operate a lockstep, said in May that it was introducing a bonus pool to give it more flexibility to reward partners.
Freshfields did not respond to requests for comment.
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