Bonus fears keep divorce lawyers busy

The fall - actual or expected - in bonuses in London's financial community, the City, is apparently starting to have drastic knock-on domestic effects: increasing numbers of long-suffering wives of high-earning, hard-working bankers and hedge fund managers are turning to their divorce lawyers for advice on how to protect their own interests.

A fifth of all high earners in the City knows a colleague who has been on the receiving end of divorce proceedings since the economic downturn started, according to research commissioned by Sandra Davis, a partner at Mishcon de Reya, the law firm that represented Diana, Princess of Wales, among other high-flying divorcees.

The survey of 100 City analysts, stockbrokers and hedge fund managers found that one in 10 were worried that their own spouse might be seeking legal advice, with a further 13 per cent saying they are more concerned about the impact of a marriage break-up on their finances.

"Most concern is among those who have been married for between three and seven years, with those who have been married less than two years least concerned, reflecting that either the honeymoon period lasts for up to three years or new wives have had less time to get used to the high life,'' Ms Davis said.

The survey emerges after a series of big-money divorce settlements have confirmed London's reputation as the world's most lucrative place to divorce rich men. Sir Paul McCartney's ex-wife Heather wills won £24m (€30m, $47m) from the former Beatle earlier this year.

Since then lawyers that specialise in big-money divorces have advised their clients to enter into pre-nuptial agreements.

However, all is not doom and gloom though for City marriages. A surprisingly high 71 per cent of respondents in the survey said they shared "everything'' with their partner about their finances.

That sense of unity does not seem to cover the bonus payment itself. Nearly 40 per cent admitted giving their spouses "none'' of their annual reward.

Elite London lawyers lose to rivals

London's elite law firms are losing business to cheaper rivals as the credit crunch forces their clients to take a harder look at their discretionary expenses, according to new research.

Acritas, the legal sector researcher, found that more than a quarter of -clients are expected to increase spending with regional firms over the next 12 months.

Another 20 per cent expect to shift work to national stalwarts such as Eversheds and DLA Piper, where average charge-out rates for partners can be more than a third less than those charged by the five "Magic Circle" firms - Clifford Chance, Freshfields, Linklaters, Allen & Overy and Slaughter and May. "The movement is to save cost," said Lisa Hart, Acritas chief executive.

The research was compiled from interviews with about 650 senior legal services buyers.