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Changing Views on Law Firm Partnership [by Helen Kim] As more associates decide they no longer want to strive to reach the near-perfect standards required to make equity partnership, firms are responding by creating new tracks that still allow for career advancement to keep them interested.
Associates’ Views on Partnership Has
area, but also the associate’s potential to be a
Inevitably, there remains a plethora of senior
savvy business developer.
level associates who start to feel alienated
Today’s associates are not necessarily as in-
Road to Partnerships Is Getting Longer
and, unless the firm gives them effective feedback on the prospects of partnership, will most likely opt to quit the firm.
terested in making partner as they once were. For some, it seems more unattainable and
The fast track at top law firms is slowing
less desirable than it has been for associates
down. Major law firms are sometimes pro-
One method firms have been using to deal
in the past. This is especially true coming out
longing the period leading up to partnership
with this situation has been the institution
of a recession, when firms are typically elect-
because of the desire for more experienced
of non-equity partnership tiers. In fact, over
ing fewer partners. As a result, there appears
associates, an active market for lateral part-
the years, many changes have occurred in
to be a definite shift in the goals of some of
ners and greater pressure to improve profit-
the traditional partner-associate structure.
today’s law firm associates.
ability. At firms where an associate’s first
Permanent associates, temporary attorneys,
shot at partnership once came around 7 years
staff or contract lawyers, of counsel and non-
Increasingly, lawyers are now more focused
after law school graduation, it can now come
equity partners (NEPs) have all been added to
on using their time at law firms to gain work
around 10 years after, or longer.
to commit long-term. Associates often leave
Partners want associates to have more expe-
Non-equity partnerships have long been
law firms before they can even be considered
rience. However, at the same time, clients are
utilized by large law firms, but the use of this
for partner, either by moving in house or out
demanding leaner staffing on matters thereby
alternative is on the rise. In fact, most large
of the profession entirely. In fact, we’ve met
resulting in fewer opportunities for associates
law firms have created some form of NEPs.
some associates who go to law firms without
to gain experience. And in a down economy,
Even smaller firms are following the trend.
any intention of staying there long enough to
there are less deals where associates can
The popularity of this structure continues to
be a partner. Law firms do not always discour-
build their skills. Also, lateral hiring of part-
grow to the extent that the number of non-eq-
age such attitudes since economically they
ners with business results in a large pool of
uity partners in many firms is increasing more
can’t make everyone partner.
homegrown senior associates who have to
rapidly than the number of equity partners.
experience and earn money, without having
wait for partnership consideration. Further, NEPs - Reasons For The Rise.
There are many reasons why associates quit,
there is another pool of lateral senior associ-
including poor performance reviews, the pres-
ate hires who usually have to face a prolonged
sure of billable-hour requirements and family
wait for partnership as well, especially since
There are at least five reasons more firms
obligations. Another very common reason
firms often take their time to reach a high
are creating an NEP tier:
why associates leave their firms is the lack of
comfort level with associates who were
perceived opportunity for advancement. Espe-
trained elsewhere. Finally, because low part-
1. to lengthen the equity partnership track in
cially in extremely large law firms, associates
nership numbers drive up profits per partner,
order to give younger lawyers more time to
believe making partner is out of their grasp.
firms may be wary of making a large number
build their skills and their business;
And, for many, it is true. The bar is certainly
of even well-qualified associates partners.
2. to postpone on having to decide who deserves to make partner;
higher to become an equity partner. The say-
3. to avoid reducing profits per partner, par-
ing, “you work hard and pay your dues and you’ll make partner” no longer always applies.
What Is Left For Those Who Do Not Make
ticularly when profits are down;
Partnership is not just about a well-developed
4. to try to retain associates who may not, or
skill set or technical expertise in a practice
will not, become equity partners and might
continued on back
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5. to accommodate the many young lawyers today who don’t want to become equity part-
Non-equity partnership is not the only alter-
ners because they don’t want to assume the
native for a firm. Other options include creat-
responsibilities associated with partnership,
ing a permanent category of “senior associ-
and a non-equity partnership will provide this
ate,” “senior lawyer,” or “special counsel”;
or designating certain associates as “senior associates” and giving them substantial bo-
Types of NEPs.
nuses. This usually indicates the firm’s strong commitment to making these associates eq-
There are two types of NEPs: temporary and
uity partners once they complete the normal
partnership track. Of course, there is always the option to just let go of senior associates
Temporary status. In firms where NEP status
without allowing them to achieve partnership.
is defined as “temporary,” or simply an additional step to full partnership, associates (or
laterals) are elected NEPs for a designated
Just because the prospect of equity partner-
period, usually not more than two to three
ship is not as easy to come by or may take
years. The additional time before consider-
longer than in the past does not mean that
ation for equity status enables them to gain
you cannot have a long, stable career with a
more legal and client service experience,
law firm. At the very least, you should know
develop areas of expertise and develop more
that there are other options available for
business. It also gives the firm more time to
lawyers at law firms besides straight equity
evaluate the lawyers.
partnership. Perhaps a non-equity partner-
Permanent status. In firms where the cat-
for your career goals. If your current law firm
ship arrangement may even work out better egory is defined as “permanent,” NEPs will
is not in a position to offer you partnership, an
generally not then be considered for equity
attractive alternative to partnership or even
partnership--although there can be excep-
go into discussions about your prospects for
tions. In order to retain these lawyers, the
partnership, don’t be discouraged. There is no
firm designates them as “partners” to the
need to feel that there is no longer a place for
public without defining their NEP status.
you within the realm of a law firm. Perhaps it’s just time to go into discussions about join-
The Advantages of NEPs. NEP status has advantages for both lawyers and law firms. For one, while the lawyers are considered to be full partners to the public, they gain additional time to develop before facing the possibility of not being elected to full partnership. And lawyers who don’t wish to assume the financial obligations and time commitments required of equity partners can still become partners. From the firm’s perspective, the tier allows them to buy time and hold on to valuable lawyers without having to make them full equity partner.
ing another law firm.
Published on Sep 21, 2012
Published on Sep 21, 2012
Changing Views on Law Firm Partnership. Firms are responding by creating new tracks that still allow for career advancement to keep them int...