Feb. 28 (Bloomberg) -- Italy's top lawyers are the highest paid in Europe, earning about 1.3 million euros ($1.7 million) a year, followed by partners in Germany, Spain and the U.K., a survey found.

Italian profits were buoyed by corporate, banking and capital markets work and a larger-than-average number of salaried associates per partner, according to a 15-country study of 47 law firms by accounting firm BDO Stoy Hayward. Fees from $1.95 trillion in European takeovers in 2006 accounted for 27 percent of average revenue at the firms surveyed.

``The wave of merger and acquisitions activity across Europe has continued during this period,'' Nick Carter-Pegg, a London- based partner at BDO Stoy, said in an e-mailed statement, adding that with private equity firms driving many transactions the trend could continue through 2007.

Germany's highest-paid lawyers surveyed earned about 1.05 million euros in 2006, while Spain's partners made 1 million euros and Britain's partners earned about 819,000 euros at the top end, according to a draft copy of the survey due to be published next month. The average profit per partner among respondents was about 465,700 euros in 2006, a 15 percent rise over 2005.

Pay Gap

While some Italian lawyers may be millionaires, there is a large spread between the high earners and less experienced partners, said Franco Bonelli, a Genoa and Milan-based corporate partner at Bonelli Erede Pappalardo Studio Legale.

In England, the gap between the highest- and lowest-paid partner may be 2.5 times, while in Italy ``the highest paid partner can get 10 times more,'' Bonelli said in a telephone interview yesterday.

Bonelli's firm runs a modified ``lockstep'' remuneration system in which partners distribute a portion of the profits equally and then reward high performers based on their contribution.

Seventy-five percent of European law firms pay partners based on performance rather than the traditional lockstep linked to seniority, according to the study conducted jointly by BDO Stoy with London-based European Lawyer magazine and a division of legal publisher Reed Elsevier Plc.

While the survey found Germany's high earners doubled their profits in 2006 compared with 2005, some lawyers weren't convinced that the findings accurately reflected the market.

``2006 was a great year but I doubt there are many around who doubled their profits,'' Maximilian Schiessl, a Dusseldorf-based corporate partner with Hengeler Mueller, said in a telephone interview yesterday.

Increasing Experience

Hergen Haas, a finance partner at Frankfurt-based Smeets Haas Wolff, said that while his partners significantly increased revenue in 2006 that is because Smeets's younger lawyers are gaining experience and, as a result, increasing billable hours.

``In the first years when lawyers worked five hours they could bill two of them,'' Haas said. ``Now they can bill all of them.''

German attorneys billed the most in Europe, according to the study, charging an average of 328,000 euros each. U.K. lawyers ranked second, with an average of 300,000 euros per lawyer.

Polish lawyers were at the bottom end of the rankings, with the highest-earning lawyers making 384,200 euros, according to the study.

The survey used median figures -- the value where there are an equal number of participants with a higher and lower result -- throughout. Average profits were calculated by dividing the law firm's total profit by the number of partners.

The median number of lawyers for participating firms was 121, with the figure rising to 1,045 in the U.K.

Profit per Equity Partner 2006.

Of the 15 countries surveyed, BDO Stoy presented separate analysis of
profit per equity partner for eight jurisdictions. All figures are in
thousands of euros:

            Belgium Finland Germany Italy  Poland Spain Sweden U.K.
Lower
Quartile:   253.6   375.9   306.4   1067.4 156.4  348.3  274.1 747.0

Median:     322.8   385.6   660.9   1323.3 268.8  522.8  449.1 784.4

Upper
Quartile:   441.2   456.8   1052.9  1362.5 384.2  1003.1 623.1 818.9

Sources: BDO Stoy Hayward, European Lawyer magazine,
LexisNexis Martindale-Hubbell.

To contact the reporter on this story: Caroline Byrne in London at cbyrne12@bloomberg.net.

Last Updated: February 28, 2007 08:25 EST