Joining about 85% of BigLaw firms, WilmerHale adds nonequity partnership tier
“The nonequity tier is growing like crazy,” said Bruce MacEwen, president of Adam Smith Esq., a law firm consultancy. (Photo from Shutterstock)
Only about 15 law firms in the Am Law 100 have single-tier partnerships, Law.com reported in July.
The number decreased by one with an announcement last week by Wilmer Cutler Pickering Hale and Dorr. The firm is adopting a nonequity partner tier to provide “more flexibility to attract, promote and retain the most sought-after talent in a very competitive market,” said Anjan Sahn, managing partner at WilmerHale, in a statement.
Law.com, Reuters, Bloomberg Law and Law360 published the statement in their coverage of the move.
WilmerHale’s 253 equity partners will be unaffected by the addition of a second tier, the articles report. Nonequity partners, also known as income partners, don’t share in firm profits.
WilmerHale’s decision follows the adoption of a nonequity tier by Cravath, Swaine & Moore in 2023 and by Paul, Weiss, Rifkind, Wharton & Garrison in the past year, according to Law.com.
Reuters cited a 2023 report finding that 86% of the nation’s top 200 firms have at least two tiers of partnerships.
“The nonequity tier is growing like crazy,” said Bruce MacEwen, president of Adam Smith Esq., a firm consultancy that published the report.
Nonequity partners can charge higher rates than associates and can more readily be laid off, MacEwen told Reuters.
But some two-tier partnerships can be problematic, particularly when there is not enough work to go around, said Kent Zimmermann, a consultant with the Zeughauser Group, in email comments to Law.com.
In that situation, some nonequity partners may “keep working for themselves rather than pushing it down to associates,” Zimmermann said.
He added that some firms may accept underperforming nonequity partners “who act as caddies for equity partners.”
Some firms are proud of their single-tier status, despite their dwindling numbers in the Am Law 100, which consists of the nation’s 100 top-grossing firms. Among them is Wachtell, Lipton, Rosen & Katz.
Wachtell Lipton co-chairs Andy Nussbaum and Bill Savitt told Law.com in a July interview that their firm is single-tier and lockstep for compensation. They said a nonequity-tier approach has tradeoffs for firm culture and client service that aren’t consistent with their philosophy.
Other BigLaw firms that remain single-tier include Covington & Burling; Skadden, Arps, Slate, Meagher & Flom; Davis Polk & Wardwell; and Debevoise & Plimpton, according to Law.com.
