The legal firm hierarchy has long been recognized by the significant distinction between equity and non-equity partnerships. An equity partner at a legal firm entails the sharing of firm’s risks and benefits among its partners. However, with time the concept of non-equity partnerships, resembling glorified counsel positions, diluted the traditional structure. Worse still, these non-equity positions have often served as career stagnation points for women and minorities, enabling firms to showcase their apparent inclusive partnerships without actually sharing the spoils. Learn more about the issue here and here.
Cravath, a law firm with a reputation for holding out against this trend, has now decided to join the two-tiered partner wave. The firm discreetly established a salaried partner tier, aligning it with many Wall Street legal firms that have been reshaping their pay schemes in reaction to new competitive forces. According to Cravath’s presiding partner Faiza Saeed, the company recently established the “salary partner role” as a measure to promote and retain senior talent. You can learn more about this move from Bloomberg Law.
Such subtle rebranding is interpreted by some as an indication that Cravath has a number of salaried barristers who are not seen as potential partner material. The critical question is: Are the younger generation attorneys not meeting the old standards, or is it just the top echelon clinging to power a tad too much?
Furthermore, the whispers among legal circles indicate that Cravath won’t be the last firm to introduce such a change. Major player Paul Weiss is also reported to be mulling over a similar shift in partnership framework. Please refer to the American Lawyer for more details.
The original news article is available here.