The Rule of Thirds

There's a rule of thumb that the partners take 1/3 of the profits for themselves and this broadly looks to be the case looking at the UK Top 200 in 2025

Partners retained 33% of profits across the Top 200 (weighted average), or an unweighted median of 32%

Remarkably similar to our 2022 analysis in The Legal MBA Essentials, which also showed profit before partner remuneration of...

...32%

The chart below shows the distribution across the Top 200 for 2025 (minus a couple of outliers), and broadly suggests that 24% for partners is ok (lower quartile), 32% is average and 38% is good (upper quartile), looking across this group

Within the sub-groupings, we see average profitability dip for top 50 - 150 firms, but this is more a function of wide variation within that group, rather than the group being typically less profitable

Of the 11 firms with partner profits > 50% of revenue, 9 are in the 50 - 150 grouping

Similarly, of the 11 firms with partner profits < 10% of revenue, 9 are in the 50 - 150

To me this indicates that the "mid-sized" firm is a difficult one to get right - potentially too small to achieve economies of scale, but too big to benefit from the increased focus and agility from being small

There's always a need to treat snapshots like this with caution, profitability can swing from year to year, but it's a helpful sense check as firms close out their Q4 and finalise 2025/27 budgets

With thanks to Adil Taha for collating and sharing the data from the 2025 statutory accounts - please do get in touch with Adil if you'd like the underlying data and to discuss all things PE investment

And if you find yourself wanting for a better financial performance in 2026/27, you know where to find me :)

Histogram showing distribution of 2025 partner profits as % of revenue (UK 200, 2025)