Now in Legal Rebels:
Posted Nov 16, 2009 01:50 pm CST
Reed Smith will give its nonequity partners a choice: Pony up a percentage of your salary or lose your partnership status.
The firm will likely ask for a contribution of 15 percent of base pay, the American Lawyer reports. The firm has about 300 nonequity partners who can opt to pay now or over the next few years, earning the title of “fixed share partners.”
Reed Smith chairman Gregory Jordan told the American Lawyer that the move isn’t designed simply to add cash to the firm’s coffers or to cull nonequity partners. “The reality is we are having a very strong year,” he said.
Jordan said some nonequity partners outside the United States already have a financial stake in the firm, and the change will bring consistency to the nonequity ranks. “It’s about not just saying you’re a partner, but actually being one,” Jordan told the American Lawyer. “It means something. It revolves around risk-sharing in the business.”
The story says the move “has unnerved a chunk of the nonequity partner ranks.”
Reed Smith announced earlier this month that it will cut billing rates and pay by 20 percent for 51 new associates joining the firm’s U.S. offices in January. New starting salaries will range from $130,000 in major markets to $110,000 in Pittsburgh.