You made partner! Now what?
The transition from associate to partner in the legal industry is no easy task. Yet, the time will come in which hard work will show through, and an associate will be trusted with his or her own clientele, and granted the opportunity to develop one’s professional and business reputation as a partner.
There is no blueprint or a guide for a hardworking associate to a secure position as partner. For some, it may take around ten years from one’s starting point as a legal clerk until they accomplish the end goal. As the industry progresses in this day and age, the steps and qualifications to make partner are changing. Not only are they changing, but creating much more competition for the many who also strive for that title.
Let’s take a look at this matter through a global lens. According to The Australian Financial Review’s Law Partnership Survey of 2018, less than half of the new partners in large law firms in Australia were internally promoted, while the remaining were partners hired from external firms, compared to over 60 percent internally promoted the year prior.
The transition from associate to partner is no simple feat; there is no higher ranking individual to report to. All calls, budgets, hiring and management duties are thrust onto the partner with no training. They must take their years of quiet observation behind the scenes and put that knowledge into action.
Becoming a partner is, for the most part, a change in label. One’s role in the firm remains the same, yet there are added responsibilities, such as initiating marketing efforts. Also, there is extra knowledge one must have regarding the inner workings of the firm, including financials, structure, and office politics. Most importantly, a partner is a mentor. They are responsible for guiding the associates under their supervision.
Money makes the world go round…
In terms of salaries, the base salary for a first year associate in the average firm in the United States is $180,000. In addition, they earn a bonus devised by each firm’s respective formula. On the other hand, partners have earned the position of being one of the few shareholders in the companies itself. In comparison to BigLaw, smaller law firms typically promote quicker, as there is more upward mobility with less people.
For example, the law firm of Cravath, Swaine & Moore LLP, currently one of the most reputable law firm in the United States, set the precedent of increasing their starting salaries and bonuses, with other top firms quickly following. Firms with lower base salaries still have great opportunities for large bonuses to maintain a competitive status.
According to the data provided by the 2016 Partner Compensation Survey held by Major, Lindsey & Africa LLC., 40 percent of the law firms do not have a bonus option, and the average bonus of the remaining 60 percent was 15 percent of the firms’ profits. In contrast, lower ranking average US law firms salary ranges from $46,912 for associates to $82,948 for partners annually, according to the survey responses of tens of thousands of practicing attorneys across the nation.
According to compensation trends by cities, law firms in the Silicon Valley, Los Angeles, San Francisco and New York were the highest paying firms. Aside from geographic location, one’s specialization also greatly determines their salary as a partner. The highest remains Corporate partners at $1,055,000, while the lowest are Labor & Employment partners at $597,000 in the United States.
In regards to partnership status, the salaries for equity and non-equity partners have both increased steadily. On average, equity partners make $1.1 million annually, while non-equity partners make roughly $367,000 annually. Also, length of service to the firm heavily impacts salary. According to partnership tenure, attorneys make $450,000 on average for the first five years of the partnership, and when they reach seniority of 21 or more years of practice, they are typically making over $1.2 million annually.
All in all, the compensation rates are on a steady incline as the years progress. Evidently, associates are striving to gain partnership status, as the economic rewards are unparalleled. Although it is certainly a large transition, with added responsibility, the financial benefits an equity partner will reap are well worth the dedication and effort.