The firm had implemented a new compensation system late last year
Global firm Freshfields has recently shown some partners the door and reduced equity shares in its push for US growth, reported the Financial Times.
The move follows the implementation of a new performance-based compensation system late last year. The new system supposedly grants the firm more flexibility to increase salaries for talent attraction and retention.
The majority of partners received 40 equity points under the previous pay structure, though others could attain 100 points. Tenure was highly rewarded, with each point being worth ~£70,000 in 2025, per the FT’s sources.
However, under the new system the number of equity points for several partners fell. The cuts have impacted not just the Freshfields partners in London, but those in Paris and Germany as well. The firm also implemented a non-equity tier to its partnership, copying US firms looking to bestow the title of partner on young lawyers without affecting equity.
Rival law firms told the FT that Freshfields lawyers had been applying for positions with them thus far – including those who may have been forced out and those discomfited by Freshfields’ recent moves. The FT noted that while Freshfields has carved out a position in America, it is recruiting in a market where senior-level legal talent can ask for over US$20 million per year.
The FT said Freshfields declined to comment on the matter. The Magic Circle firm has not reported its financial results voluntarily since 2023 – at the time, its average profit per equity partner was £2.09 million. This year, Freshfields fell off the list of the 10 law firms offering the highest profits per lawyer.
Over the 2025/2026 financial year, global firm Ashurst recorded £1.152 billion in total revenue – an increase of 11 percent – with a PEP of £1.592 million. Eversheds Sutherland reported a profit of £209.4 million and a 14 percent increase in PEP to £1.61 million, according to the Law Society Gazette.
Simmons & Simmons recorded £245 million in reported profit and an 11 percent boost to PEP, which hit £1.25 million. Shoosmiths, which has offices across the UK as well as in Brussels, reported just £80 million in profit but recorded a 3 percent increase in PEP to £1.04 million.
