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UNIT FIVETEXT ONEBoosted by booming international financial markets, the City of London has not had it so good since the end of the dotcom bonanza in the late 1990s. Basking in double-digit growth rates, Londons law firms have both contributed to that success and benefited from it. The earnings of top City lawyers can now exceed ￡2m a year. Having opted to expand and go global ahead of most others, Britains leading law firms tend to be bigger than their American rivals. Indeed, according to a survey of the worlds top 50 law firms, compiled by Legal Business, a British trade paper, five of the worlds top six law firms—in terms of turnover—are now British (if DLA Piper, the result of an Anglo-American merger, is included). But they have tended to lag behind in terms of their profitability. That is now changing.The profit margins of the Citys five “magic circle” firms—Clifford Chance, Slaughter and May, Allen Overy, Linklaters and Freshfields—have soared in recent years and are now comparable with, if not higher than, those of New Yorks “white shoe” elite. Slaughter and May, the only one of the five not to have gone global, has the joint second-highest profit margin among the top 50. Not so long ago, a London surgeon could expect to earn as much as a City lawyer. But even the recent big rises in hospital consultants earnings pall in comparison with those enjoyed by London lawyers. At Slaughter and May, for example, average profits per equity partner (PEP) jumped by almost a third (in dollar terms) last year to $2.75m—more than at any other of the top 50 law firms bar two in New York where PEP averaged $2.8m and $3.0m respectively. Some senior partners get a lot more of course. Competition for the best lawyers is fierce and poaching frequent. Hence the need to keep headline PEP figures up—even at the cost of getting rid of equity partners, leaving a bigger share of the bounty for the remaining ones. Freshfields is in the process of shedding around 100 of its equity par