How the Big Philadelphia Law Firms Approach Non-Equity PartnershipsFebruary 22, 2013 – In The News
Big law firms streamlined their associate and support staff ranks after the recession hit but many are carrying bloated levels of non-equity partners despite the continued contraction or flattening of demand for legal services. The numbers of lawyers promoted to partner each year has not waned much since the recession hit and almost all of those promoted are promoted to non-equity status.
Managing Partner Mark Silow noted that his firm is not as highly leveraged with non-equity partners as some other larger firms because it allowed some associates to move directly to equity partner. But this year, Silow said the firm adopted a rule that says an associate must spend at least one year as a non-equity partner before obtaining equity status.
Fox Rothschild’s fiscal year ends March 31, so vetting starts now and decisions will be made by April. The firm requires eight years experience before applying to become non-equity partner. He noted that some non-equity partners are key to client relationships even if they don’t have business themselves. He said that some firms require incoming lateral partners to start with non-equity status in hopes that they progress to equity.
“And a lot are just not able to do that,” Silow said. “They might come in with $300,000 in business and you expect them to build it to $1 million and they don’t. So those people become vulnerable.”