Biglaw

Top 50 Biglaw Firm Creates Nonequity Partnership Tier To Create More 'Promotion And Development' Opportunities For Attorney Talent

Cleary Gottlieb had an all-equity partnership for all of its existence, but times have changed, and now the firm needs to change too.

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lawyer race compete associate race to partnershipBiglaw firms with single partnership tiers are now few and far between, with more big-name firms showing that they’re ready, willing, and able to welcome nonequity partners to their ranks.

Cravath was one of the first longtime holdouts to cut bait and create a “salaried partner tier” (i.e., nonequity partners) back in November 2023. That move gave other highly ranked firms permission to tread the same path, including Paul Weiss, which announced its new two-tier partnership plan in March, and WilmerHale, which made its two-tier partnership announcement in August. Now, Cleary Gottlieb is announcing its own new partnership platform.

Last year, profits per equity partner at Cleary came in at $4.5 million, and the firm — which brought in $1,491,568,000 gross revenue in 2023, putting it at No. 32 on the most recent Am Law 100 — decided that it was time to move forward with a two-tier partnership to “create more opportunities in promotion and development,” per managing partner Michael Gerstenzang. According to the , the changes are “effective immediately.” Here are some additional details:

[Gerstenzang] said the nonequity tier will see its first candidates when the firm has its annual partnership evaluations, which are currently transpiring. Last year in late October, the firm announced the promotion of 15 lawyers to partner.

“It is meaningful to say that we think Big Law is in a period that calls for innovation and adaptation,” Gerstenzang said in an interview. “That is true across the board and has to extend to talent development and management. It’s not the only example, but it is one.” …

Overall, he said Cleary is not looking for a certain critical mass (or percentage of the partnership) to be non-equity, but rather allowing those that go into that track to “grow as professionals in the non-equity tier and to have the opportunity to become a partner.”

He said nonequity partner salaries — which he declined to specify — would be commensurate with the market, including factoring in practice area and geography.

Gerstenzang went on to say that the expectations for nonequity partners at the firm will be “very consistent with how we think about junior partners.” He continued, explaining, “Almost no one is promoted to partner as a full-fledged partner. We all grow into our positions. That is true today and true under the new program.”

Biglaw firms are making major moves on partnership and compensation in order to recruit and retain rainmakers and to calm dissension within their ranks — and we can expect more firms to follow the leader in the years to come. According to the 2024 Client Advisory from Hildebrandt Consulting and Citi’s Global Wealth at Work Law Firm Group, 83% of Biglaw firms expect to increase the size of their income partner roles in the next two years.

Is your firm planning to move to a black-box compensation system for partners or increase its nonequity partnership ranks? Please please text us (646-820-8477) or email us and let us know. Thanks.

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Cleary Creates Nonequity Partner Tier, Calling For ‘Innovation and Adaptation’ [American Lawyer]

Staci ZaretskyStaci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on X/Twitter and Threads or connect with her on LinkedIn.

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