Freshfields Restructures Partnership Equity Model
The international law firm is reshaping its equity management as it works to align partner compensation with value creation.
Updated on Oct. 16, 2026 in Corporate Finance
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Beginning in autumn 2025, Freshfields initiated a sweeping restructuring of its partnership model to control equity allocations and boost profitability. The strategy includes rigorous performance reviews and adjustments to partner pay across its global network.
Why it matters
The changes follow years of stagnant profit per point and aim to revitalize firmwide financial performance after a major period of expansion. The firm is now prioritizing individual productivity metrics to optimize its compensation structure.
Freshfields reported a 22% five-year increase in average profit per point, while US revenue grew 172% over the four-year period ending in 2025. The firm currently employs approximately 500 lawyers and 100 partners in the US.
The players
Freshfields
This global law firm provides legal services to multinational corporations and financial institutions and maintains a significant partnership base.
Ethan Klingsberg
He is a prominent attorney who joined the firm in 2019 to help spearhead the firm's major US expansion.
Grace Huang
A legal professional who departed the firm for a position at Latham & Watkins in Hong Kong.
Edward Freeman
A partner who exited the firm to join Latham & Watkins in Hong Kong.
Nigel Gleeson
He is an attorney who moved his practice to Gibson Dunn in Singapore.
The details
Freshfields is actively scrutinizing individual performance to align rewards with value creation, a shift that has coincided with the departures of at least 13 partners from the US office in 2026. These changes follow an aggressive expansion strategy that included the addition of 50 lateral partners in the US since 2019.
Timeline
Freshfields began its US platform expansion in 2019.
The firm commenced its radical partnership reshaping in autumn 2025.
Private capital partners departed from Germany and Italy in January 2026.
The firm climbed into the LSEG top 10 for M&A during the first 9 months of 2026.
Profit per point results showed an 8% increase for the 2025-26 fiscal year.
Market Dynamics
Freshfields' transition reflects the broader industry movement toward merit-based compensation systems within elite global law firms. By shifting away from traditional profit distributions, the firm aims to compete more aggressively for top talent in an increasingly volatile global legal market.
For investors and corporate clients, this restructuring suggests a firm focused on high-margin mandates and aggressive talent retention in key markets. Stakeholders should monitor if these structural shifts maintain the firm's competitive standing in high-value M&A activity.
The takeaway
The move demonstrates how top-tier firms are re-evaluating long-standing compensation models to drive profitability in a competitive global market. Partners and firms must balance individual performance incentives against the need for organizational cohesion and long-term stability.
Further reading
For broader analysis on industry compensation, see Corporate Finance.
Source note: This article includes information reported by Legal Business.
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