Fixed Share Partners
There are very few UK law firms that are pure equity partnerships. This structure is very much in decline. Most law firm partnerships have several different levels. Historically, the first entry into a partnership was salaried partnership. This was, and still is, a role which is taxed under schedule ‘E' (PAYE). Today this role has, in the main, been replaced by fixed share or ‘B' equity positions. These roles are taxed under schedule ‘D' and whilst individual structures can vary enormously, these are typically made up of a fixed, guaranteed element and a small amount of equity and/or a bonus. Many of these fixed share roles have no voting rights.
Packages vary from £80,000 at the smaller law firms through to £300,000 plus at major international practices.
The recruitment market at this level is very active. Many law firms prefer to recruit at this level rather than at full equity, as it is easier and quicker to get an offer agreed internally since there is often no need for a full partnership vote. Also, if an individual is found to be unsuitable, there is a reduced notice period of 6 months as opposed to 12 months. This level is often used as a ‘getting to know you' period before equity is considered.
Client followings are normally expected, but there are always exceptions to the rule depending on market conditions, area of specialisation, specific circumstances and particular need.
In today's market, roles without the need for a following are rare, but they do tend to exist within specialist areas like: