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grizzly bear

Accountants / Lawyer Top Earnings

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I had lunch with a former colleague this week. He is a partner at a large (but not big 4) accountancy firm.

He said that for him and the other partners, 2009 earnings will be 30%-45% less than last year - this is a trend that is being repeated at other accountancy and law firms he says - also some partners will be forced out.

He said at peak those earning £300k could easily borrow well in excess of £1m.

Clearly drop in income not a problem at all whilst rates are so low, but could be a problem if they increase?

Now their earnings more likely to be in £160k range and borrowing limited to £500k.

This must have an impact on top end London property market????

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Probably but it's unlikely these people will be first time buyers so will have plenty of equity in their current homes. They'll probably have other investement they can use to buy a house if they really want it.

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I know several partners in big 4 accountancy firms and they tell me that depending on the service line, small increases in workload (audit, insolvency and corporate restructuring) or catastrophic decrease (mergers and acquisitions tax planning - the regular M&A guys switch to insolvency in times like these but the M&A tax specialists can't) but overall income levels remain broadly at 2008 levels, however exceptional items (redundancies, provisions against leases that are no longer needed) have hurt the partner draw and there has been a rumour about for a while that one of the big 4 has asked the partners for a capital contribution.

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London is soon going to take a bath. I worked for a law firm. They have just had a twenty percent drop in fees. That equates to a forty percent drop in profit for the 300 partners.

At that end of the market, none of them will default on the mortgage will they? They just won't be buying BTL portfolios?

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In fact, they will probably be driven to sell some properties, to maintain their lifestyles.

The really clever ones, should be OUT of BTL by now, and looking for work beyond lawyering

My mate's a barrister and her job has just been outsourced to Africa.

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