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Summary: As more big law firms move towards increasing their number of non-equity partnerships, the accompanying salary may not be such a bad thing for those partners.
More and more law firms are turning to non-equity partnerships. Non-equity partners receive a salary but no ownership stake in the firm or a share of the profits. Law firms are able to cap-off how much money is being paid out to their attorneys, keeping greater parts of the shares for the equity partners, members, and shareholders.
Read 2016 Law Firm Salary Chart – Firms Announcing Raises.
Shearman & Sterling has been de-equitizing partners recently, causing a stir in the news. Other Am Law 200 firms have been keeping up with this trend by using more and more salaried partners. Since 2010, there has been a negative growth in the number of equity partners, whereas non-equity partner numbers have grown just over 2 percent. When looking at Am Law 50 and Am Law 101-150, the growth of non-equity partner average compensation has doubled the average compensation of other salaried partners.
The actual salary that these non-equity partners are receiving does not get the same amount of attention as the fact that more law firms are moving to more non-equity partners. Even though non-equity partners may not be getting a share of the profits, they can still make very healthy incomes. View this list to see what that top 10 average compensations are at these top law firms. Clearly a salary of nearly $900,000 and up is nothing to complain about.
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See 2016 Law Firm Associate Salary List for more information about law firm salaries.
A big risk for law firms to move in this direction is the amount of money coming straight out of the firm’s net income. When partners earn their income based on the profits of the year, they are more motivated to make sure the firm is going to have a big income to receive from. Non-equity partners are not invested in the firm’s income, because they already know the amount they will be taking home at the end of the day.
Take a look at the below list to learn which firms reward their non-equity partners nicely.
Top 10 Firms by Average Compensation Per Non-Equity Partner
| Rank | Firm | Average Compensation Per Non-Equity Partner |
|---|---|---|
| 1 | Quinn Emanuel | $1,077,586 |
| 2 | Paul Hastings | $1,055,556 |
| 3 | Wilson Sonsini | $1,017,857 |
| 4 | Latham Watkins | $994,318 |
| 5 | Weil | $983,051 |
| 6 | Kramer Levin | $970,588 |
| 7 | Cadwalader | $970,000 |
| 8 | O’Melveny & Myers | $961,538 |
| 9 | Milbank | $958,333 |
| 10 | Hughes Hubbard | $880,952 |
Source: ALM Intelligence
Photo: gobankingrates.com
