Partnership. For many, many BigLaw associates, partnership is the holy grail of a BigLaw career. Partnership represents the pinnacle of success, the reward for many, many years of hard (often grueling) work. And it’s true that for many, if not most, of associates who aspire to partnership, the payoff will indeed be rewarding.
Yet, few associates entering BigLaw really know what making partner entails and/or means, both of which can have a significant impact on whether partnership is really what they want. Some firms do better than others at teaching associates the business ropes, but often this education comes later than it should, piecemeal, and/or through the grapevine rather than through formal messaging.
In this blog post, we’re going to explore what partnership generally looks like in BigLaw, what you can expect on a path to partnership, and what you’ll get once you make it.
Why Do So Many Associates Dream of Partnership?
As always, generalization is tricky. But by and large, there are certain aspects of partnership that shine brightest for aspirational associates.
Money. Regardless of the partnership structure (which can vary, as we’ll discuss below), partner compensation ranges from generously above associate pay all the way up to eye-popping.
Status. Think about the phrase “making partner.” In other words, you’ve “made it.” Everyone knows that partnership requires hard work and earned respect. Being a BigLaw partner, for many, is a status symbol.
Leadership. In BigLaw, partners run the show. Becoming a partner means managing clients, running cases, and—let’s be honest—delegating all the grunt work.
Partnership Can Be an Opaque Concept
Partnership starts to lose transparency when it comes to actually achieving it, from both outside and inside. There are several reasons for this.
From an outside perspective, partnership is where BigLaw firms start to really diverge from each other. The BigLaw associate experience tends to be largely lockstep when it comes to compensation and advancement; BigLaw salary scales are published and almost uniform across firms, and promotions are based entirely on class year.
Partnership could not be more opposite. Every firm has a different process, or “track,” with different timelines and expectations regarding hours, business development, etc. Moreover, partner compensation varies widely on a variety of bases, including how many tiers of partnership exist at a firm.
Even internally, most associates entering BigLaw from law school are not armed with information about partnership prospects or processes when they join, nor do many of them gain this knowledge in their early associate years. In part, this is because firms do not always openly share partnership information with associates, leaving the burden on associates to ask questions and learn through informal channels.
As an associate, there are certain things to look at when trying to understand BigLaw partnership, which we’ll dive into next.
Partnership Structures Can Vary
Historically, partnership was a single tier, and represented ownership of a piece of the firm. Rather than taking a regular salary, partners’ fortunes were directly linked to the success, or failure, of the firm, with the idea being that ownership would lead to maximum investment.
In more recent years, many firms have stepped away from the one-tier structure and instead created two classifications of partner: equity and non-equity. In this model, equity partners are the owners, while non-equity partners are typically employees who receive salary or some other form of fixed income. Non-equity partners can also be known as income partners, and while they generally are compensated far below equity partners, they do enjoy the prestige of partner title and leadership responsibilities.
Equity Partner Compensation Structures Can Also Vary
Within equity partnership, there are also different profit-sharing models that can have a huge impact on a partner’s earning potential, or “profits per partner.” An associate contemplating partnership would be advised to consider a firm’s profit-sharing model; depending on the model, expected earnings can be dramatically different.
The simplest model is equal sharing, in which total profits are divided evenly among the partners; this division can be equal across the board, or based on seniority level, with every partner in seniority tiers receiving equal amounts.
The other popular model is “eat what you kill,” which itself can have variations; under this model, partners are compensated based on clients that they bring in. Also known as “origination credit,” the idea is that if a partner brings in a client, they should benefit from all profits that come to the firm through that client. There are pros and some pretty significant cons to this model that aren’t the focus of this blog today.
The Things People Don’t Talk About When it Comes to Making Partner—but Should
While the above aspects of partnership may be more varied and opaque, at least their existence is largely known. There are also certain aspects of making partner that could be of critical importance and yet remain far too unknown.
Non-billable hours matter. Of course billable hours are top priority, but at most firms, billables alone won’t get you to partnership. Firms want to make partners who bring the whole package to the table: lots of billables, yes, but also many hours devoted to business development (i.e. getting clients), firm engagement (such as mentorship and committee work), and more.
You probably need a sponsor. In this context, a sponsor means a partner who will go to bat for you when you’re up for partner. A sponsor is your advocate, someone who will make the case for you beyond what you’ve done yourself. Is a sponsor required to make partner? No, but having one dramatically increases your chances. (In a future blog post, we’ll go into greater detail about how to build the relationships necessary to find a sponsor, and what a sponsor can do for you.)
Non-equity partners may never become equity partners. This is going to be highly firm specific, but in some instances, becoming a non-equity partner could wind up being a dead end. For many people, that’s just fine—in fact, becoming non-equity partner can be a far better arrangement. But if your heart is set on making equity partner, you need to know if non-equity partner might be a stepping stone or the end of the road.
When you make partner, your take-home comp could go down (at first). An article from Bloomberg describes this somewhat surprising reality:
“...The transition to partner can be financially difficult. Many new partners are not prepared; grabbing the golden key may require paying in capital, being taxed as a K1 owner of a partnership, and dealing with a complex set of financial expectations and obligations, not to mention liability and significant compliance limitations. And while the financial rewards of partnership will certainly be extensive, the transition and first year can be complex, and cash flow difficult.”
In other words, transitioning from senior associate to equity partner can be expensive, and could set you back quite a bit financially. To be clear, this is only true for equity partners, who typically are expected to “buy in” to the partnership—before the expected compensation hike. Hence, the first year or two could result in a financial hit that new partners should be prepared for.
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Partnership is an incredible accomplishment for any associate, and a very worthy goal. Knowing what to expect before embarking on that path can only set you up for success.
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