Law.com reports on a recent study released by Citigroup Private Bank. The study suggests that rising law firm expenses (higher associate salaries and rents) will create upward pressure on billable hours and downward movement on the number of partners who are invited into the equity ranks. One law firm consultant quoted in the article seems to think this is all bad news.
“I think that making it harder to become an equity partner than it has been in the past may actually work to the detriment of some firms, because associates coming into these firms looking ahead to the prospect of becoming an equity partner may throw up their hands and say ‘I’ll never make equity partner, why should I even try?'”
The reality, however, is that most associates at major firms already do not expect to make equity partner and many have no ambition of doing so. While upward pressure on billable hours is a scary thought, I’m not sure that less equity is such a bad thing. The accounting firms have already figured out that professionals need ongoing opportunities to advance their careers. So a system which provides lawyers with only one or two chances for advancement (non-equity partner and then equity partner) no longer makes sense.
I speak with so many young associates who would happily trade salary for a chance to advance more slowly. If firms would insert several layers of promotion into their ranks, then lawyers would have more opportunity to decide whether to go for maximum income (through a series of promotions) or to stick with a balance between good work, good compensation, and livable hours. Under such a system, an individual lawyer could decide to go through the hurdles necessary to achieve counsel and senior counsel status but not do what it takes to get to non-equity I, non-equity II or equity partner status (and still hold a good job!) Too unrealistic? Only if you rely too much on precedent to make management decisions.