What Does it Mean to Be a Partner?
The nature of big law firms has changed. There are fewer equity partners than there were in the past. Most lawyers now do not share in the profits of their law firms. Because of changes in the law industry, what it means to be a partner has changed. Most lawyers starting out in their careers dream of being made a partner. However, if this is your goal, you need to know what being a partner means now in this new legal corporate environment.
The majority of lawyers who achieve the position of partner with their firm become non-equity partners. This is a relatively new concept in the legal field. It started being used in the 1980’s, but is really taking off in the industry in the current business environment. There are different tiers of partnership in most law firms now. There is less job security for non-equity partners. In fact, non-partners often have more job security. They are not expected to bring in a certain amount of business to the firm like non-equity partners are. If the non-equity partners do not bring in enough new business, they can be dismissed from the firm.
Non-equity partners are essentially middle management, and equity-partners-in-training. They get a bigger salary than regular lawyers, and a nicer sounding title, but in most other ways are not any different than non-partner lawyers.
On the other hand, equity partners do have job security. It means you are performing consistently at the level your law firm expects, and as long as you continue to do so, your job is secure. You’ve already proven you are a professional who can perform at high levels and who has a good reputation in the law industry and the community in which you work.
Once someone is made an equity partner, they are given a loan to “buy in” to the firm. This means they become a part-owner, and get part of the firm’s profits in addition to their salary. The cost to “buy in” is usually in the tens of thousands of dollars. Those who can afford to pay it on their own can do so without getting a loan from the firm.
Equity partners are more invested in the success of the firm, because they have a financial stake in it. When the firm does well financially, they do well financially.
The title partner can mean different things at the same law firm. It depends on what position a person has within that firm and what tier they are on in the company hierarchy. You’ll find that all types of partners get similar benefits, such as health insurance, a pension, and other similar things. However, the move from non-equity partner to equity partner is not a lateral one. It may have a similar title, but the position and its perks, responsibilities, and expectations are quite different. Most of the firms on the AmLaw 200 have both non-equity and equity partners. Which one you become and the level at which you settle in for your career depends on your ambitions, financial needs, and goals.