What happens to lawyers who don't partners after 8 years?

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jrwhitedog
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What happens to lawyers who don't partners after 8 years?

Postby jrwhitedog » Mon Nov 08, 2010 6:17 pm

So do they still stay in the same firm or are they expelled? And does that mean they'll never make partners again?

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vanwinkle
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Re: What happens to lawyers who don't partners after 8 years?

Postby vanwinkle » Mon Nov 08, 2010 6:20 pm

If you're not on track to make partner you are shown the door, usually politely, at most firms. Many of these people will go and join smaller firms where they will make partner; others become in-house counsel; others go into public interest or government work; others leave the law profession.

Some law firms now have a second "non-equity-partner" track, which allows you to become a "non-equity partner" and stay on at a fixed salary and not receive any equity. This basically makes you a permanent employee of the firm, and you make more than associates, but less than the equity partners ever do.

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Noval
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Re: What happens to lawyers who don't partners after 8 years?

Postby Noval » Mon Nov 08, 2010 6:24 pm

vanwinkle wrote:If you're not on track to make partner you are shown the door, usually politely, at most firms. Many of these people will go and join smaller firms where they will make partner; others become in-house counsel; others go into public interest or government work; others leave the law profession.

Some law firms now have a second "non-equity-partner" track, which allows you to become a "non-equity partner" and stay on at a fixed salary and not receive any equity. This basically makes you a permanent employee of the firm, and you make more than associates, but less than the equity partners ever do.


Will i still be able to make Equity Partner if i do several years in Non-Equity Partnership ?
I'm only a few years away from making Partner in the Big firm i work at, they also have a Non-Partnership track but these informations are very classified for some reason so most Associates do not have access to them until the time comes for them to apply for these positions.

From your experience, did you see Non-equity partners going Equity after a few years ?
Personnally, it's not such a big problem for me as i can go In-House quite easily where i live, just wanted to know more about it.

Thanks in advance.

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jrwhitedog
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Re: What happens to lawyers who don't partners after 8 years?

Postby jrwhitedog » Mon Nov 08, 2010 6:29 pm

Could you be more specific about the salaries of each group?

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vanwinkle
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Re: What happens to lawyers who don't partners after 8 years?

Postby vanwinkle » Mon Nov 08, 2010 6:51 pm

Noval wrote:Will i still be able to make Equity Partner if i do several years in Non-Equity Partnership ?
I'm only a few years away from making Partner in the Big firm i work at, they also have a Non-Partnership track but these informations are very classified for some reason so most Associates do not have access to them until the time comes for them to apply for these positions.

From your experience, did you see Non-equity partners going Equity after a few years ?
Personnally, it's not such a big problem for me as i can go In-House quite easily where i live, just wanted to know more about it.

The way I understand it, generally, the answer is no. If you become a non-equity partner, it is because a decision has been made not to make you an equity partner. The point of the non-equity partner track is to keep around people who might still be useful even if they don't want them to be equity partners, but they've already decided you're not what they're looking for in an equity partner.

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Re: What happens to lawyers who don't partners after 8 years?

Postby bigben » Mon Nov 08, 2010 6:52 pm

jrwhitedog wrote:Could you be more specific about the salaries of each group?

Going rate for biglaw 1st year associate is 160k with some large and midsize firms paying anywhere between 90k and 160k. Beyond that it varies too much to make any generalizations.

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vanwinkle
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Re: What happens to lawyers who don't partners after 8 years?

Postby vanwinkle » Mon Nov 08, 2010 6:54 pm

jrwhitedog wrote:Could you be more specific about the salaries of each group?

Looks like market pay for an eighth-year associate right now is $280,000 (going by http://en.wikipedia.org/wiki/Law_firm). If I remember right, profits per equity partner (PEP) drops rapidly from the top of the Vault and levels out at about or just under $1M in the V10-V20 range. So for the rest of the V100 you can assume PEP will be around or just under $1M per year.

That should give you a rough idea of the top of the salary range and the bottom of the partner range at big firms. I don't care if the above is slightly incorrect, because it's just painting a picture and not meant to be exact.

bigben
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Re: What happens to lawyers who don't partners after 8 years?

Postby bigben » Mon Nov 08, 2010 6:57 pm

vanwinkle wrote:
Noval wrote:Will i still be able to make Equity Partner if i do several years in Non-Equity Partnership ?
I'm only a few years away from making Partner in the Big firm i work at, they also have a Non-Partnership track but these informations are very classified for some reason so most Associates do not have access to them until the time comes for them to apply for these positions.

From your experience, did you see Non-equity partners going Equity after a few years ?
Personnally, it's not such a big problem for me as i can go In-House quite easily where i live, just wanted to know more about it.

The way I understand it, generally, the answer is no. If you become a non-equity partner, it is because a decision has been made not to make you an equity partner. The point of the non-equity partner track is to keep around people who might still be useful even if they don't want them to be equity partners, but they've already decided you're not what they're looking for in an equity partner.

I don't have broad-based knowledge but this is not how it works at the firms I know about. You make non-equity partner at 6 years and it's relatively easy to do compared to equity partner. You're not up for equity partner until 8 years at which point you either make equity or continue as a non-equity partner, and there is the possibility of making equity partner in subsequent years.

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Re: What happens to lawyers who don't partners after 8 years?

Postby vanwinkle » Mon Nov 08, 2010 7:00 pm

bigben wrote:I don't have broad-based knowledge but this is not how it works at the firms I know about. You make non-equity partner at 6 years and it's relatively easy to do compared to equity partner. You're not up for equity partner until 8 years at which point you either make equity or continue as a non-equity partner, and there is the possibility of making equity partner in subsequent years.

That's fascinating. I've no direct knowledge so I admit what I said could have been completely wrong.

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Re: What happens to lawyers who don't partners after 8 years?

Postby bigben » Mon Nov 08, 2010 7:07 pm

Just found this:

There are two principal types of nonequity partnerships—permanent and temporary. In firms where the category is intended to be permanent, those who are made nonequity partners generally are not considered for equity status at a later time—although there can be exceptions.
In firms where the status is defined as temporary, or just an additional step to full partnership, associates (and sometimes laterals) are elected nonequity partners for a designated period, usually not more than two years. They are then considered for equity partnership. The additional time before reaching equity status enables these lawyers to gain more experience in their chosen areas of practice, in client service and in business development. And, of course, it gives the firm more time to evaluate these lawyers’ potential as stakeholders.
Some firms that have a temporary nonequity tier also provide for exceptions so that a “fast-track” associate may bypass the tier and be elected directly to equity partnership. Some of these firms also allow associates to request temporary nonequity status if they wish to work part-time for a while (usually to start a family) but then return to full-time practice.
In addition, some firms combine the temporary and permanent categories in their nonequity tier. A key advantage of having both is that it provides some flexibility in allowing a supposedly “permanent” nonequity partner to enter candidacy for equity partnership at some point in the future.


http://www.americanbar.org/publications ... _pg12.html

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Re: What happens to lawyers who don't partners after 8 years?

Postby rayiner » Mon Nov 08, 2010 7:18 pm

vanwinkle wrote:
bigben wrote:I don't have broad-based knowledge but this is not how it works at the firms I know about. You make non-equity partner at 6 years and it's relatively easy to do compared to equity partner. You're not up for equity partner until 8 years at which point you either make equity or continue as a non-equity partner, and there is the possibility of making equity partner in subsequent years.

That's fascinating. I've no direct knowledge so I admit what I said could have been completely wrong.


It depends on the firm. At Kirkland, all share partners come from the non-share partner pool. Instead of having an 7/8/9th year associates, they make people non-share partners (NSPs) after year 6. Within a few years as NSP it's clear whether you're going to make share partner or not.

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ZXCVBNM
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Re: What happens to lawyers who don't partners after 8 years?

Postby ZXCVBNM » Mon Nov 08, 2010 7:29 pm

when profits per partner is reported...is that what the partners actually make?

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Re: What happens to lawyers who don't partners after 8 years?

Postby Anonymous User » Mon Nov 08, 2010 7:37 pm

The Kirkland system isn't universal. Other firms use non-equity partnerships in the way vanwinkle described.

What happens to associates passed over varies from firm to firm. Some firms let you stay another year and take another stab at it before you're shown the door. Other firms let you keep trying for as long as you want. Other firms will let you be "of counsel," with the chance of later becoming an equity partner. It really varies.

Even the notion of "of counsel" varies. While, for some firms, it is used to denote associates passed over for partnership. At other firms, it's the title for partners who are retired but who still have significant ties to the firm in terms of generating work, etc.
Last edited by Anonymous User on Mon Nov 08, 2010 7:55 pm, edited 1 time in total.

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Re: What happens to lawyers who don't partners after 8 years?

Postby Anonymous User » Mon Nov 08, 2010 7:39 pm

when profits per partner is reported...is that what the partners actually make?


No.

You have to deduct capital contributions. After that, what the exact partner take-home is depends on the firm. Some firms are lockstep, others use shares.

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Re: What happens to lawyers who don't partners after 8 years?

Postby ruski » Mon Nov 08, 2010 8:01 pm

wait you have to make capital contributions every year? i thought it was just your first year (i.e. buy-in)? whats the rough range for cap contribution? are we talked like 1-2% or 10%?

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Re: What happens to lawyers who don't partners after 8 years?

Postby Anonymous User » Mon Nov 08, 2010 8:02 pm

wait you have to make capital contributions every year? i thought it was just your first year (i.e. buy-in)? whats the rough range for cap contribution? are we talked like 1-2% or 10%?


It is just for the first year, but it reduces the partner's first year income significantly.

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vanwinkle
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Re: What happens to lawyers who don't partners after 8 years?

Postby vanwinkle » Mon Nov 08, 2010 8:13 pm

ruski wrote:wait you have to make capital contributions every year? i thought it was just your first year (i.e. buy-in)? whats the rough range for cap contribution? are we talked like 1-2% or 10%?

I believe some firms will let you spread your buy-in out over multiple years. How this is handled will vary from firm to firm.

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Re: What happens to lawyers who don't partners after 8 years?

Postby James Bond » Mon Nov 08, 2010 8:21 pm

jrwhitedog wrote:So do they still stay in the same firm or are they expelled? And does that mean they'll never make partners again?


http://www.youtube.com/watch?v=aQ9GrZ3CEyY&feature=fvw

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Noval
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Re: What happens to lawyers who don't partners after 8 years?

Postby Noval » Mon Nov 08, 2010 9:21 pm

jrwhitedog wrote:Could you be more specific about the salaries of each group?



Equity-Partners in BigLaw: Anywhere from 200,000$ to 3 milions, more if you're a founding Partner.
Typical All-in income with Bonus included: 500,000$

Equity-Partners in Small/Midsize firms: 120,000$ to 500,000$ most likely.
Typical All-in income with Bonus included: 220,000$

Non-Equity Partners in BigLaw: Around 320,000$ to 450,000 $ for most cases.
Typical All-in income with Bonus included: 400,000$

Non-Equity Partners do not exist anywhere outside BigLaw, there may be exceptions in a few select firms but it stops there.

Source: I'm a BigLaw Attorney and i have several Partner friends in both BigLaw/Small/Midsize firms.

@vanwinkle, thanks for the insight, i think i might simply consider In-House Counsel or Government Work if i don't make Equity Partner.

boalt2l
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Re: What happens to lawyers who don't partners after 8 years?

Postby boalt2l » Mon Nov 08, 2010 10:29 pm

One thing not brought up on TLS is the disadvantages of being a partner. As partner you have to sign onto all the firms liabilities. Most of the large law firms are leveraged to the hills on huge lines of credit, which if they default on, you will be personally liable to pay for.

Kochel
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Re: What happens to lawyers who don't partners after 8 years?

Postby Kochel » Mon Nov 08, 2010 10:30 pm

Noval wrote:
vanwinkle wrote:If you're not on track to make partner you are shown the door, usually politely, at most firms. Many of these people will go and join smaller firms where they will make partner; others become in-house counsel; others go into public interest or government work; others leave the law profession.

Some law firms now have a second "non-equity-partner" track, which allows you to become a "non-equity partner" and stay on at a fixed salary and not receive any equity. This basically makes you a permanent employee of the firm, and you make more than associates, but less than the equity partners ever do.


Will i still be able to make Equity Partner if i do several years in Non-Equity Partnership ?
I'm only a few years away from making Partner in the Big firm i work at, they also have a Non-Partnership track but these informations are very classified for some reason so most Associates do not have access to them until the time comes for them to apply for these positions.

From your experience, did you see Non-equity partners going Equity after a few years ?
Personnally, it's not such a big problem for me as i can go In-House quite easily where i live, just wanted to know more about it.

Thanks in advance.


Am I the only one who finds this line of questioning odd? If you have questions about the partnership track at your own firm, why would you go to an anonymous Internet board, most of the posters on which are not even practicing attorneys, instead of asking, say, other lawyers at your firm?

Anyway, as others have pointed out, there is great variety among big firms in how their partnerships are structured: multiple tiers, varying periods of time, different capital contribution requirements, etc. One other thing to keep in mind is that firms can always change the rules on you midstream--i.e., make you wait additional years before elevation, deny you partnership altogether, create new inferior levels, and so forth.

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Re: What happens to lawyers who don't partners after 8 years?

Postby Kohinoor » Mon Nov 08, 2010 10:35 pm

boalt2l wrote:One thing not brought up on TLS is the disadvantages of being a partner. As partner you have to sign onto all the firms liabilities. Most of the large law firms are leveraged to the hills on huge lines of credit, which if they default on, you will be personally liable to pay for.

That... doesn't sound right.

(b) A person admitted as a partner into an existing partnership is not personally liable for any partnership obligation incurred before the person's admission as a partner.
(c) An obligation of a partnership incurred while the partnership is a limited liability partnership, whether arising in contract, tort, or otherwise, is solely the obligation of the partnership. A partner is not personally liable, directly or indirectly, by way of contribution or otherwise, for such a partnership obligation solely by reason of being or so acting as a partner.
Last edited by Kohinoor on Mon Nov 08, 2010 10:37 pm, edited 1 time in total.

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James Bond
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Re: What happens to lawyers who don't partners after 8 years?

Postby James Bond » Mon Nov 08, 2010 10:37 pm

Kohinoor wrote:
boalt2l wrote:One thing not brought up on TLS is the disadvantages of being a partner. As partner you have to sign onto all the firms liabilities. Most of the large law firms are leveraged to the hills on huge lines of credit, which if they default on, you will be personally liable to pay for.

That... doesn't sound right.


Yes, lord knows being a partner would suck ass, not to mention the complete lack of corporate/personal financial separation :wink:

bigben
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Re: What happens to lawyers who don't partners after 8 years?

Postby bigben » Mon Nov 08, 2010 10:43 pm

Anonymous User wrote:
wait you have to make capital contributions every year? i thought it was just your first year (i.e. buy-in)? whats the rough range for cap contribution? are we talked like 1-2% or 10%?


It is just for the first year, but it reduces the partner's first year income significantly.

I've only ever heard of buy-ins being spread over a number of years, and they can be significant. An equity partner recently told me what they were paying per month and it was probably about 5% of their gross income. I think this was to go on for 5 years or more.

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Na_Swatch
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Re: What happens to lawyers who don't partners after 8 years?

Postby Na_Swatch » Mon Nov 08, 2010 10:47 pm

Kochel wrote:
Noval wrote:
vanwinkle wrote:If you're not on track to make partner you are shown the door, usually politely, at most firms. Many of these people will go and join smaller firms where they will make partner; others become in-house counsel; others go into public interest or government work; others leave the law profession.

Some law firms now have a second "non-equity-partner" track, which allows you to become a "non-equity partner" and stay on at a fixed salary and not receive any equity. This basically makes you a permanent employee of the firm, and you make more than associates, but less than the equity partners ever do.


Will i still be able to make Equity Partner if i do several years in Non-Equity Partnership ?
I'm only a few years away from making Partner in the Big firm i work at, they also have a Non-Partnership track but these informations are very classified for some reason so most Associates do not have access to them until the time comes for them to apply for these positions.

From your experience, did you see Non-equity partners going Equity after a few years ?
Personnally, it's not such a big problem for me as i can go In-House quite easily where i live, just wanted to know more about it.

Thanks in advance.


Am I the only one who finds this line of questioning odd? If you have questions about the partnership track at your own firm, why would you go to an anonymous Internet board, most of the posters on which are not even practicing attorneys, instead of asking, say, other lawyers at your firm?

Anyway, as others have pointed out, there is great variety among big firms in how their partnerships are structured: multiple tiers, varying periods of time, different capital contribution requirements, etc. One other thing to keep in mind is that firms can always change the rules on you midstream--i.e., make you wait additional years before elevation, deny you partnership altogether, create new inferior levels, and so forth.


Also aren't you in a Canadian Biglaw firm Noval? I don't think US firms and CA firms have exactly the same structure/ policies.




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