Cravath, Swaine & Moore has discreetly introduced a salaried partner tier, thereby becoming the latest among multiple Wall Street law firms that have overhauled their payment structures in response to recent market pressures. Faiza Saeed, Cravath’s presiding partner, highlighted these alterations in an internal memo, affirming that these revisions were crucial to maintain and encourage remarkable personnel at every level, thereby enriching the services provided to their clients.
Apart from Cravath, whose alterations came into effect in late 2021, other global law firms have also been exploring this path. For instance, Paul, Weiss, Rifkind, Wharton & Garrison are said to be debating the idea of adopting a non-equity partner tier in 2024.
The introduction of non-equity partner tiers by Cravath, among others, signifies an end to the traditional bifurcated career structure of law firms. Additionally, new layers to the law firm hierarchy, such as the salaried partner role, are being seen as effective instruments for retaining talent and generating more liquidity for equity partners.
Currently, Cravath has around five to ten partners in the salaried tier, as per anonymous informants familiar with the matter. Other distinguished firms with non-equity partner tiers include Kirkland & Ellis, Simpson Thacher & Bartlett, and Willkie Farr & Gallagher, while Davis Polk & Wardwell, Cleary Gottlieb Steen & Hamilton, Debevoise & Plimpton and Wachtell Lipton Rosen & Katz uphold the traditional single-tiered partnerships.
Despite these shifts, Cravath has remained rooted in its reputation as a premier corporate law firm, advising prominent clients such as Amazon, Walt Disney Co., and Johnson & Johnson. Still, these changes weren’t introduced without a few notable departures, including dealmaker Damien Zoubek.
On one hand, the firm has managed to support these shifts by diversifying this year, opening an office in Washington and launching an English law offering in the UK. Meanwhile, Saeed emphasizes continuity in the firm by giving assurance that lawyers in salaried partner and of counsel positions can continue to aspire for equity partnership, which she believes to benefit both the firm’s personnel and clients.
For more detailed information, refer to the original article on Bloomberg Law.