In a strategic move aimed at aligning with industry trends and optimizing talent retention, Hunton Andrews Kurth has introduced a new tier of non-equity partners. As stated by the firm’s managing partner, Sam Danon, this development involved amending the partnership agreement in April to incorporate an income partner category. This shift echoes similar actions taken by other top law firms such as Wilmer Cutler Pickering Hale and Dorr, which recently introduced a non-equity tier.
Non-equity partners retain the same title as their equity counterparts but receive a fixed income instead of sharing in firm profits. This model is increasingly prevalent, with American Lawyer data indicating that as of last year, approximately 48% of partners at the 200 largest law firms were in non-equity roles, a significant increase from 40% in 2013. Eighty-five of the 100 top-revenue law firms have adopted non-equity tiers, with 70 expanding these tiers since 2021.
This restructuring is seen as a way to attract and retain younger lawyers while preserving profit shares for top revenue generators. According to Nick Rumin, a New York-based legal recruiter, the partner title inherently helps firms attract business and convey the message that they support a contingent of up-and-coming legal professionals.
Notably, firms like Cravath Swaine & Moore and Paul Weiss Rifkind Wharton & Garrison, which historically maintained single-tier partnership structures, have recently adopted two-tier models. Contrarily, firms such as Davis Polk & Wardwell, Debevoise & Plimpton, Wachtell Lipton & Katz, and Ballard Spahr remain among the few holding onto single-tier systems.
Interestingly, Hunton Andrews Kurth has maintained a separate non-equity class for years but has declined to detail how this older structure differs from the newly instituted non-equity tier. Kevin White, co-chair of the firm’s labor and employment team, highlighted that as of this year, associates must pass through the non-equity tier before being considered for full partnership, framing the promotion to a partnership as a business deal aimed at enhancing the firm’s profitability.
Moreover, the transition to non-equity tiers has not been without controversy. Multiple non-equity partners have filed lawsuits, asserting that they were misclassified as partners to benefit the firms.
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