Shearman reportedly considers demoting some equity partners
Shearman & Sterling managers are reportedly discussing a plan to de-equitize some partners, particularly those practicing in less profitable practice areas and regions.
The Am Law Daily (sub. req.) has a story that is based on information provided by an anonymous partner who confirmed a Legal Week report. The goal of such a plan is to increase profitability and focus on priority practice areas.
The law firm issued this statement to the Am Law Daily: “As with all firms, we regularly review how and where we invest equity and manage head count.”
Partners who spoke with the Am Law Daily said efforts to oust unproductive partners have been hampered by Shearman’s partnership agreement. It requires 75 percent of the equity partners to approve removal of any equity colleagues who don’t agree to their own de-equitization.
The firm does have the authority, however, to trim equity partner compensation by up to 25 percent each year—which could provide the impetus for partners to consent to their removal from equity partnership.