Large law firms with only one level of partnership are now few and far between, while more and more reputable firms are demonstrating that they are willing and able to welcome non-equity partners into their ranks.
Cravath was one of the first long-time holdouts, throwing the bait and creating a “paid partner tier” (i.e., partners with no equity) in November 2023. That move gave other top-tier firms permission to follow the same path, including Paul Weiss, which announced its new two-tier partnership plan in March, and WilmerHale, which made its announcement earlier this week.
Last year, WilmerHale’s profit per equity partner exceeded $3 million, up 10%, and the firm — which generated $1,498,257,000 in gross revenue in 2023, ranking it 31st on the most recent Am Law 100 list — decided that with all that free-flowing money, now was the right time to implement a two-tier partnership. According to the National Law Journal, the changes will take effect immediately. Here are some additional details:
Anjan Sahni, managing partner of Wilmer, said in a statement that creating a non-equity partnership layer will give the company “more flexibility” for talent.
“Creating a partnership income tier gives us more flexibility to attract, develop and retain the most sought-after talent in a very competitive market. This is a win for our clients, the firm and our lawyers, who will have another opportunity for advancement,” said Sahni.
Large law firms are making big changes to partnerships and compensation to recruit and retain rainmakers and calm dissension within their ranks—and we can expect more firms to follow suit in the coming years. According to the 2024 Client Advisory from Hildebrandt Consulting and Citi’s Global Wealth at Work Law Firm Group, 83% of large law firms expect to increase the number of their income partners over the next two years.
Does your company plan to move to a black box partner compensation system or increase the number of non-equity partners? Please text us (646-820-8477) or email us and let us know. Thank you.
Wilmer adds the non-equity partnership tier, making it the latest player at two tiers (National Law Journal)
Staci Zaretsky is a senior editor at Above the Law, where she has worked since 2011. She welcomes your feedback, so feel free to email her with tips, questions, comments, or criticism. You can follow her on X/Twitter and threads or connect with her on LinkedIn.
