Summary: Many attorneys have heard of equity partners, non-equity partners, and of counsel partners. However, what exactly do these roles entail for these lawyers? Read more to find out.
To many, the ranking of attorneys within a law firm is a mysterious system. Harrison Barnes explains the hierarchy within law firms in his latest article: What Law Firm Titles Mean: Of Counsel, Non-Equity Partner, Equity Partner Explained.
All attorneys start their careers as associates, and many will go on to become of counsel, non-equity partners, or shareholders (that is, unless they are fired after several years of working at the firm!). But what responsibilities does each of these roles bring to the attorney?
1. Of Counsel
Of counsel is a position that is not a partner, but not an associate. Typically, the role is reserved for attorneys that the firm wants to keep around, but of counsel attorneys typically do not have a great deal of business and do not want to work 80 hour work weeks. The role can differ from firm to firm, of course.
Of counsel positions have an air of permanence about them. In contrast, associate positions are viewed as more temporary positions, as partners in the firm know that the attorneys may leave at any time.
So which attorneys end up in these positions? As stated above, of counsel attorneys typically do not have massive amounts of business. As an example, Barnes notes the firm Skadden Arps—to make partner there, one must typically have attained national recognition. If you’ve stayed at a firm like this for over a decade, then an of counsel position may be what’s next for you. The positions are great “safety nets” for good attorneys who may not be ready to take on the partner position at a law firm.
Other attorneys prefer an of counsel position because they do not want the pressure of a partner position. This could mean a pay cut of over $100,000 when compared to a partner role, but these attorneys gladly accept it for the reduced pressure they will face. Their billing requirements and responsibilities are much less demanding than those of partners.
Older attorneys who have been outside of firm settings for a while may miss the law firm life and return as of counsel. Typically, these attorneys will have a reduced workload, which they like, and the firm can boast the attorney’s credentials, which makes clients happy. Older attorneys who wish to slow down may also prefer an of counsel position.
Attorneys who may lack interpersonal skills that bring clients to the firm (but who do excellent work), who must spend a lot of time away from the office (for example, due to health issues, outside businesses, or raising a family) or in a practice area of the firm that is not as profitable as the other areas may also land of counsel positions. Firms very much want to keep these attorneys on board, and an of counsel position is the perfect fit for these attorneys.
2. Non-Equity Partners
This role made its first appearance in the 1980s. During the 80s, many law firms hired consulting firms and realized that, unfortunately, there were partners they were paying that just weren’t that profitable. This is where the idea of equity and non-equity partners came in.
Non-equity partners do not have the same job security as of counsel positions, as it is comparable to being like an associate with the additional requirement of bringing in business. If you don’t bring in business, you could be packing your office into a box and leaving the firm.
Like of counsel positions, most non-equity partners do not have a large business and receive a salary instead of partnership distributions. Typically, these attorneys have served as associates in their firms, and are being observed in the non-equity partner role to see if they would work well in a true partnership position in the firm. On the contrary, equity partners may take a non-equity position for a while to give them time to build up business for the firm.
Equity partners may be asked to take on non-equity partner roles if they are not billing enough hours, have performance issues, or the firm has determined it needs two partnership tiers, among others reasons.
Non-equity partners typically demonstrate ambition and drive to eventually become an equity partner. Their interpersonal skills are strong, they have a great work ethic, and have valuable legal skills—they just aren’t quite at the partner level yet.
At very large firms, for example, White and Case, it can be extremely difficult to make non-equity partner. Barnes notes that White and Case brings on 60 first year associates each year, so competition is fierce, and only a couple of attorneys, at most, will be considered for such a position.
If you do make non-equity partner at a very large firm, you’ll be given a salary of maybe $350,000 per year, will get to redecorate your office, and will receive instruction that you now need to generate business for the firm. You’ll need to bring in enough business to support yourself and other attorneys in the firm. Barnes compares it to being on probation. To get business, the non-equity partners will need to go into the community or receive work from other partners.
If, after a few years of review, the non-equity partner is not bringing in the desired amount of business to the firm, they may go-in house, open their own practice, or move elsewhere. If these attorneys move to other firms, they can use the business they do have to make themselves marketable to smaller firms. Unfortunately, many equity partners exaggerate the amount of business they have, even going so far as to provide fictional write-ups about their billings. These facts are often impossible to verify, and, once the non-equity partner makes the move to the new firm, clients suddenly aren’t ready to move firms, or the partner blames his old firm for “playing dirty” and keeping business there.
3. Equity Partners
Once you’ve made equity partner, you can rest assured that you’re performing close to the levels the firm requires of its partner positions. However, expectations vary among firms. Typically, equity partners have outstanding reputations both inside and outside the firm, and have no problem carrying their own weight in a firm—they generate business, bill tons of hours, and are able to support associates. These partners have stronger interpersonal skills, more clients, bill more hours, and are more invested in the firm than their non-equity counterparts.
Many of these firms are required to be “invested” in the firm to become owners, which means they may need to invest up to hundreds of thousands of dollars into the firm. Equity partners are also more involved in the business aspects of the law firm, such as evaluating other attorneys, firing people, recruiting other attorneys, making advertising decisions, finding office space, and overseeing the IT department. These attorneys are required not only to increase clientele, but also must inspire their coworkers. Equity partners will need to keep themselves and those beneath them busy.
Of counsel, non-equity partners, and equity partners play very different roles within law firms, and these positions vary significantly from firm to firm. To read more about these positions, and to see an example of a partnership agreement and a list of major firms with a two-tiered partnership plan, check out Harrison Barnes’ article What Law Firm Titles Mean: Of Counsel, Non-Equity Partner, Equity Partner Explained.
For law firm partner jobs, please click here to find out latest openings on LawCrossing.com.
Photo credit: ebillinghub.com