Achieving partnership is a special moment in a lawyer’s career. After years of long nights, difficult deals and office politics you are now almost at the top of your profession. I say “almost” because in many cases salaried partnership has more disadvantages than advantages.
The advantages can’t be denied. It is one more step up the ladder, a new title to help go out and develop further business and an increase in salary.
Not all salaried partners want to be equity. Some are very happy with the arrangement and these are the lucky ones.
Then why is it that so many salaried partners I work with tell me they would only move if they get an equity position?
Being salaried partner usually means having few of the perks of being equity but a lot of the responsibilities. Salaried partners are viewed as employees of the firm and as such do not have as much of a say in the direction of the firm. They are not true owners of the firm and therefore, in most (but not all cases) limited in what they can earn. Also, moving can be problematic should they wish to join one of the major firms as many do not consider non-equity partners and even fewer offer equity to non-equity partners.
As more pressure is put on billing levels for all fee-earners, salaried partners could find themselves caught between being the face of the firm as partner, managing junior lawyers and billing enough hours to justify their position. Given the way firms are run now, and how competitive it is within a law firm, it is also very difficult to find the time to build a practice or even take partner credit for clients “owned” by the more senior partners.
So what is the solution and how does one guarantee the jump up to equity?
- Move firm: obviously as a head hunter this would be my default answer. But seriously, if you have a book of business or portable clients which isn’t enough to justify equity at your current firm then simply find a firm which will want you on board and can offer you equity. Last year I moved a salaried partner into the head of ECM at a top 20 law firm and he went in as full equity. He has a better title and took a 40% increase in salary. His firm did not believe his clients would move and so were unwilling to offer him the promotion to equity. My client thought otherwise and was proved right. The only loser in this situation was the former employer who didn’t have faith in their employee of 17 years. Along with my candidate went a £2.2m book of business. A word of advice though – don’t move on a promise of equity unless there is a written guarantee on timeline. No one can predict the future and a change in circumstance can mean you are stuck as a salaried partner at a new firm but without the good will of your previous employer.
- Build your business: Work hard at making existing clients of the firm your own. This does not just mean running deals but make yourself indispensable to them. Know their business, develop a personal bond and do not let them think of your firm when instructing – make them think of you personally. Moreover, get out there and network and develop new clients outside of your current firm’s roster. I firmly believe business is built on personal relationships first and cemented by skill set afterwards. Networking at business events, lunching and generally getting your name out there can do wonders. This does not happen overnight and unfortunately, it is not something encouraged by many law firms. However, it is an essential step in making yourself indispensable to your current firm. Once you are in that position, either your firm gives your equity or you can take your pick of whatever competitor you want to join.