Equity partner pay continues to grow, while nonequity pay is almost flat, survey says
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Average pay for equity partners has risen by $160,000 since 2010, compared to a boost of just $2,000 for nonequity partners during that period.
The average yearly compensation for equity partners is $971,000 compared to just $338,000 for nonequity partners, according to the survey of partners at larger law firms (PDF) by search consultants Major, Lindsey & Africa. Median pay is $675,000 for equity partners and $325,000 for nonequity partners. The Am Law Daily (sub. req.) summarizes the findings.
Average pay is $779,000 for male partners and $531,000 for female partners. The average for white partners is $734,000, compared to $574,000 for black partners, $479,000 for Hispanic partners, $645,000 for Asian Pacific partners, and $736,000 for partners of mixed race.
Milton Regan, the co-director of Georgetown Law School’s Center for the Study of the Legal Profession, told the Am Law Daily that law firms are paying increasing amounts of money to partners who can generate business, a trend that is compounded by lateral hires of lawyers with substantial books of business.
The pay gap between equity and nonequity partners didn’t appear to bother some law firm consultants interviewed by the Am Law Daily, who said nonequity legal positions are not generating a high enough return on investment.
Law firm consultant Brad Hildebrandt said nonequity partnerships can work if they are used to transition associates to equity partnerships. But there can be problems when law firms put de-equitized partners into the nonequity ranks, he said.
“When you de-equitize people,” Hildebrandt told the Am Law Daily, “you’re taking partners who are problems in the equity partnership and thinking the problems will go away if you put them in the nonequity partnership. They don’t.”
