Partner percentages continue to decline in BigLaw; is in-house lure part of the reason?
Shutterstock.com.
The percentage of partners at the nation’s largest law firms is slowly but steadily declining.
The percentage of partners at the largest U.S. firms dropped from 42.2 percent of the lawyer headcount in 2013 to 40.8 percent at the end of 2017, Law360 reports.
At the same time, the number of nonpartners for each partner jumped from 1.37 to 1.45, the article reports. The information is based on statistics provided to Law360 by 64 of the 100 largest firms.
At the end of 2013, only four of the nation’s 100 largest law firms reported to Law360 that their partner percentages amounted to less than 25 percent of headcount. By the end of 2017, eight law firms among the top 100 had partnerships making up less than 25 percent of their head count: Paul Weiss (14.8%), Cravath (15%), DavisPolk (15.03%), Cleary Gottlieb (15.62%), Ropes & Gray (21.08%), Shearman (21.77%), Covington (24.49%) and WilmerHale (24.75%).
Among the nation’s 200 largest law firms, 16 had partnership percentages below 25 percent.
As competition increases, law firms are trying to maintain and grow profits per partner with smaller partnerships. “A smaller number of partners means a fewer number of slices that need to be cut up when you divide the profit pool,” explained William Henderson, a professor at Indiana University Maurer School of Law, in an interview with Law360.
Peter Johnson of Law Practice Consultants identified another trend that could be affecting the percentages: More people are going to corporate law departments.
“The stigma about leaving a large law firm to go someplace else is not what it used to be,” he told Law360. “Going in-house used to be ‘going out to pasture.’ Now it’s a preferred job for many.”
Why are #BigLaw partnerships shrinking? https://t.co/relvDADhmZ pic.twitter.com/eRJ029dzxB
— Law360 (@Law360) April 23, 2018
