run26.2 wrote:That + fact that it is insanely hard to make partner at nearly all of those firms. My guess is it will get harder, too, post-ITE, if partners decide to stay on and try to recoup financial losses. That's a guess, tho.
My thoughts are a bit divergent on this topic. First off, very few associates have any idea how the partnership operates. It is a black box. You as an associate are an employee of their business. The only way we figure out anything about the partnership is when they tell us about it. It is very difficult to find out any information on how partnerships actually are run (e.g., pay bands within the equity ranks).
I think that ITE is going to re-introduce a more meaningful hierarchy of firms than what we have now. Right now, all of the firms pay the same salaries, mostly offer the same benefits, mostly offer the same career trajectory, etc. From an associate's perspective, there is little to distinguish a V10 from a V25 or a V50. You working on similar types of deals (albeit at different levels of sophistication), you have many of the same clients and you have many of the same exit opportunities (and I do appreciate that the V10 offers slightly *better* opportunities than say a V40 firm, but for the most part, I think they pretty minimal). In my opinion, I think the parity of biglaw shops resulted from the unprecedented level of legal demand during the bubble.
ITE, legal demand is down. Not only is it down, but most clients have become increasingly cost sensitive with respect to basic commodity work (e.g., garden variety leveraged debt deals, capital raises, etc.). However, not all work is created equal and clients are willing to continue to pay high rates for sophisticated legal work (e.g., bet the company litigation, M&A deals, IPOs, etc...). Many of the V10s (and even up into the V20s/V30s) are the go to firms with respect to this type of work. The majority of the V10s have had banner years. ITE is over for them at this point. These firms have revenue per lawyer back to $1m+ per associate.
Many of the V25s and above are not faring as well. There business improved this year over last, but many of them have lost market share (i.e., they had falls in revenue) and are unlikely to ramp up revenue to pre-2008 levels. For these firms, the only way that PPP can remain close to its 2008 highs is to limit equity partnership. I expect that many of these firms will continue to shrink their equity ranks so as to keep an illusion that they are doing well (and also because well, the influential partners want to keep the cash they bring into the firm and are going to kick out the under-performing partners or threaten to jump ship to a more profitable firm).
So, I think you may actually have a better shot at making partner at a V10 than V20s and up (provided you can actually get to a V10).