Profit per equity partner (PEP) at Clifford Chance has smashed through the £1 million mark for the first time as the world’s biggest law firm saw revenues climb 16 per cent to £1.2 billion.

Clifford Chance’s PEP - a popular measure of law firm profitability calculated by dividing total profits by the number of partners who own a share in the firm - rose 25 per cent to hit £1.015 million in the year to April 30, 2007.

Passing the £1 million PEP barrier brings Clifford Chance into an elite group of UK firms that already includes "magic circle" rivals Linklaters and Slaughter and May, widely acknowledged as London’s most profitable firm.

PEP has emerged as the most popular measure of law firm profitability in recent years, in part because it is seen as a proxy for what an “average” equity partner at the firm earns. In practice, pay varies significantly between departments and levels of partner seniority and several Clifford Chance partners will have been earning £1 million, or more, a year for the past few years.

A continuing surge in global mergers and acquisitions and general financial markets pushed Clifford Chance’s revenues to a record high of £1.194 million, up from £1.024 million last year when the firm became the first UK legal practice to break the £1 billion revenue barrier.

The figures, released this morning, are preliminary and will be finalised in July.

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