Make Income Partner or Move Firms for Chance at Equity Forum

[Anonymous User]

Quick background: I am a 6th year at a firm that makes a TON of "income" partners after associates finish their 6th years of practice (you know the one). I am in the mothership city for this firm and have been assured I will make income partner but will likely not make equity. I am in finance/securities group and have been offered a spot in a comparable firm in NYC and have been told that its a 3-4 year look to make equity but it's not an "up-or-out" place so people stay on as career associates or counsels if they don't make equity (it's a one-tier partnership). I want to stay in a firm forever; no goals of going in house.

Obviously I have given it a lot of thought and talked to people but would really appreciate any feedback or insight from this crowd. I respect (for the most part) people on this board and usually they have at least a few takes I have not thought of or considered before.

Thanks all.

[Nagster5]

Assuming you're fairly indifferent between the two firms otherwise (location, lifestyle, culture, etc.) I would jump ship and take the shot at equity partnership. It sounds like even if you don't make it at the other firm you will be in basically the same boat (just being called a counsel/associate instead of an "income partner"). What's the difference in comp between a career associate at firm 2 and an income partner at firm 1?

[Anonymous User]

Assuming you're fairly indifferent between the two firms otherwise (location, lifestyle, culture, etc.) I would jump ship and take the shot at equity partnership. It sounds like even if you don't make it at the other firm you will be in basically the same boat (just being called a counsel/associate instead of an "income partner"). What's the difference in comp between a career associate at firm 2 and an income partner at firm 1?

OP here, comp is negligible difference - or so I am told. I am indifferent about cities. One key difference for me is that at my current firm you cannot stay for more than 4-5 years (with few exceptions) as an income partner but counsel at the other firm is apparently more long-term. Thanks for thoughts. It kind of jives with my thinking of one option is kind of set and out of my control and the other is at least an opportunity.

[homestyle28]

How likely is it that you'll be bringing in clients at either place? If unlikely, the long term stability seems promising.

[Danger Zone]

Any chance you could wait until you get the partner title at your current firm and then start looking to lateral to a different firm for a shot at equity? Having been a partner already might make it easier.

I'd strongly consider making the move now, too. Seems like a very promising opportunity. Good luck!

[Anonymous User]

How likely is it that you'll be bringing in clients at either place? If unlikely, the long term stability seems promising.

Probably not likely I would bring in clients at either place. So the long term stability, even to just be a worker bee, is appealing.

[Anonymous User]

Any chance you could wait until you get the partner title at your current firm and then start looking to lateral to a different firm for a shot at equity? Having been a partner already might make it easier.

I'd strongly consider making the move now, too. Seems like a very promising opportunity. Good luck!

I could get the title bump here and lateral as a partner. MY worry there was that new firms would want a book to come with or not want to give me partner title because it is a different track for them. Thanks for the well wishes!

[deepseapartners]

Quick background: I am a 6th year at a firm that makes a TON of "income" partners after associates finish their 6th years of practice (you know the one). I am in the mothership city for this firm and have been assured I will make income partner but will likely not make equity. I am in finance/securities group and have been offered a spot in a comparable firm in NYC and have been told that its a 3-4 year look to make equity but it's not an "up-or-out" place so people stay on as career associates or counsels if they don't make equity (it's a one-tier partnership). I want to stay in a firm forever; no goals of going in house.

Obviously I have given it a lot of thought and talked to people but would really appreciate any feedback or insight from this crowd. I respect (for the most part) people on this board and usually they have at least a few takes I have not thought of or considered before.

Thanks all.

I would suggest finding alums from your firm and seeing where they ended up after income partner didn’t lead to equity partner, both to get a sense of expected landings after you don’t make equity partner at your current firm and also to find someone to reach out to and get their take on the situation (although it might be worth not saying that you have already been told no shot at equity). My initial impression would be that it will be easier to get a partner position somewhere after getting the partner bump at your current firm, but you may have fewer options and more limitations on moves in order to not appear like you are stepping backwards.

[Anonymous User]

I would suggest finding alums from your firm and seeing where they ended up after income partner didn’t lead to equity partner, both to get a sense of expected landings after you don’t make equity partner at your current firm and also to find someone to reach out to and get their take on the situation (although it might be worth not saying that you have already been told no shot at equity). My initial impression would be that it will be easier to get a partner position somewhere after getting the partner bump at your current firm, but you may have fewer options and more limitations on moves in order to not appear like you are stepping backwards.

Great advice. Thank you. We have some statistics available to us and most people go in house. About 20% go to other firms.

[Anonymous User]

http://www.law.com/americanlawyer/almID/1202799986284/

What Happens to Kirkland's Legions of Income Partners?

By Roy Strom | October 09, 2017

Kirkland & Ellis announced last week that 97 new lawyers will be joining the firm’s income partnership. That partnership tier is relatively welcoming—both compared with other Am Law 100 firms, and especially compared to Kirkland’s equity partnership.

Consider this: Kirkland had 359 equity partners last year, according to The American Lawyer’s reporting. The firm currently lists about 975 total partners.

The simple fact is that most income partners—or “nonshare partners” in Kirkland lingo—will not go on to reap the windfall that comes with an equity stake in the high-powered firm. But just how many nonequity partners don’t make the cut? And what happens to them?

Past reporting by The American Lawyer has described the Kirkland partnership as an “up-or-out” model, with roughly 20 percent of income partners joining the equity tier after they become eligible about four years into their income partner tenure.

But an analysis of past income partner classes suggests that Kirkland’s so-called sharp elbows may not be all that pointed. The American Lawyer researched the current jobs of the 315 lawyers that Kirkland announced as incoming partners between 2010 and 2013.

Of the 316 partners promoted during that four-year period, 43 percent remain at the firm. The analysis found that 43 percent of the 70 income partners made up in 2010 are still at Kirkland. The 2011 class, which featured 82 lawyers, has winnowed to 29, or 35 percent. Half of the 84 partners made up in 2012 are still at the firm. And 44 percent of the 2013 class remains at Kirkland.

While more lawyers enter Kirkland’s income partnership every year than almost any other firm, the position at Kirkland is less of a long-term play than at other firms. Jones Day’s partnership is comparable only insofar as it promotes a relatively high number of lawyers every year. In 2012, the firm promoted 45 lawyers to what it states is a “one-tier” partnership. Today, 73 percent remain at the firm.

The most common landing ground for Kirkland’s income partners is at other Am Law 200 firms. Across the four Kirkland income partner classes analyzed by The American Lawyer, roughly a quarter of those lawyers are now practicing at other firms, according to those firms’ websites, state bar registrations and individual profiles on professional networking website LinkedIn. Two of the most common firms for Kirkland refugees are King & Spalding and Sidley Austin.

After other jobs in Big Law, the second most common role after a Kirkland income partnership is an in-house position. That is where about 21 percent of former Kirkland lawyers end up. These are often high-ranking positions, with 13 partners from just four years’ worth of income partner promotions now occupying chief legal officer or general counsel roles. The list of companies that now employ Kirkland partners as in-house attorneys includes: Amazon.com Inc.; Boeing Corp.; Hulu LLC; Intel Corp.; Johnson & Johnson; Kate Spade & Co.; Koch Industries Inc.; McDonald’s Corp.; Sony Corp.; Target Corp. and more than a dozen others.

Government jobs—ranging from assistant U.S. attorneys to administrative judges at the U.S. Patent and Trademark Office—are the third most common, with less than 10 percent of lawyers taking a government paycheck. A sprinkling of lawyers start their own firms, become entrepreneurs in business or go into academia.

There are also significant gender disparities in the jobs data. The gaps show up mostly in three places.

First, men are more likely to be promoted to income partner than women, with 69 percent of the 316 partners promoted at Kirkland over the four-year span being men. That is roughly in-line with the percentage of nonequity partners that are women—about 30 percent—according to the latest survey by the National Association for Women Lawyers. (The highest percentage of women promoted to income partner in a single year of those analyzed at Kirkland was 2011, when 38 percent of new partners were women.)

Second, men are also more likely to stay at Kirkland than women. Of the 99 women promoted to income partner in the four-year period analyzed by The American Lawyer, 31 percent are still at the firm. Of the 217 men promoted in that same timeframe, 47 percent remain at Kirkland.

Thirdly, women are more likely to work in-house than men after leaving Kirkland. About 30 percent of the women who have been promoted to partner at the firm are now working in-house, compared to about 18 percent of men. In recent years, Kirkland has invested in programs that help lawyers at the firm find their next job, while also trying to strengthen bonds between the firm and its impressive list of alumni.

For instance, Kirkland launched a training program aimed at teaching its associates and alumni about in-house career paths. Thirty participants attended seminars from December through March of this year that included panel discussions with current in-house lawyers. Kirkland said the goal of the program was to prepare lawyers for future transitions to in-house roles and to support women who used to work at the firm in their effort to return to the practice of law.

Kirkland did not immediately return a request for comment about the data. In the past, the firm’s management has attributed the turnover in its partnership as a necessary byproduct of turning itself into a global legal giant. According to the most recent Am Law 100 rankings, Kirkland trailed only Latham & Watkins as the world’s most profitable firm when measured by gross revenue. Kirkland came in at No. 5 when measured by profits per equity partner.

[Anonymous User]

I’d get out of K&E while the getting is good. They are overexpanding to the point where they could be the next Dewey. They’re known for hiring mediocre people who are up or outed at better firms by luring them with huge amounts of money to become non-equity partners, and then cutting their pay or firing them a few years down the line when they realize those people can’t deliver. Plus those “market shattering bonuses” to get themselves into the ATL headlines. All of it is a major and unnecessary waste of money. As a non-equity partner, though, at least you’ll have an easier time extricating yourself when shit eventually hits the fan than an equity partner would.

[Anonymous User]

I’d get out of K&E while the getting is good. They are overexpanding to the point where they could be the next Dewey. They’re known for hiring mediocre people who are up or outed at better firms by luring them with huge amounts of money to become non-equity partners, and then cutting their pay or firing them a few years down the line when they realize those people can’t deliver. Plus those “market shattering bonuses” to get themselves into the ATL headlines. All of it is a major and unnecessary waste of money. As a non-equity partner, though, at least you’ll have an easier time extricating yourself when shit eventually hits the fan than an equity partner would.

What?! None of this is true. Overexpanding? They have 13 offices. No more than most peers, often way less. Probably too early to tell on the Boston office, but the Houston office they opened 3 years ago is one of the most profitable in the firm and has been extremely successful in the Houston market. They were top 5 in both revenue per lawyer and PPP last year. Your comment is ridiculously uninformed. There are lots of reasons why OP should consider leaving KE and going elsewhere to make equity partner, but your theory of KE's imminent Dewey-like collapse is not one of them.

[Anonymous User]

What?! None of this is true. Overexpanding? They have 13 offices. No more than most peers, often way less. Probably too early to tell on the Boston office, but the Houston office they opened 3 years ago is one of the most profitable in the firm and has been extremely successful in the Houston market. They were top 5 in both revenue per lawyer and PPP last year. Your comment is ridiculously uninformed. There are lots of reasons why OP should consider leaving KE and going elsewhere to make equity partner, but your theory of KE's imminent Dewey-like collapse is not one of them.

If you had actually read my comment past the first sentence or two, you would have realized that when I was talking about “overexpanding”, I was referring to personnel and not geographic locations. Also, PPP and revenue mean nothing if you’re spending it faster than you can rake it in. Enjoy K&E, though.

[Anonymous User]

Why not become partner, then lateral after a year or two? Its probably the most common exit route, and yes, you'd probably have to drop from partner to associate, but I'd think it would amplify your exits.