Record financial years, a tight talent market and differing philosophies on what it means to be a partner are driving many Big Law firms to promote record partnership classes this year.
On Thursday, Mayer Brown announced its largest-ever class of partners and counsel with 65 promotions throughout the firm. Similarly, Willkie Farr & Gallagher announced on the same day that it had promoted one of its largest classes ever, with 31 partners making the cut.
Throughout the industry, Bryan Cave Leighton Paisner (25); McDermott Will & Emery (41); Kirkland & Ellis (151); and Goodwin Procter (40) are among the firms that promoted their largest-ever classes to partner. Other firms, such as Ropes & Gray (24); Cleary Gottlieb Steen & Hamilton (11); and Latham & Watkins (44) saw classes significantly larger than the previous round.
Legal consultant Peter Zeughauser said that “no doubt the biggest factor” in the tremendous promotion rounds is the strong demand growth the industry has seen in the past year, which has pushed law firm revenue and profits to new highs. Also taken into consideration is the fact that many law firms promoted smaller classes to partner in the last go-round given the uncertainty still hanging around the pandemic.
According to a recent report by Wells Fargo Legal Specialty Group, 93% of law firms surveyed saw revenue increases through the first nine months of the year. Those in the Am Law 50 saw an average revenue increase of 17%, while those throughout the rest of the Am Law 200 saw a 10% increase on average.
“We haven’t seen this strong demand, certainly not in corporate, since the financial crisis, which is what we called the ’Golden Era,’” Zeughauser said.
At play is also a change in philosophy on what it means to be a partner. For example, Perkins Coie said in the announcement of its 28-attorney partnership promotion class that several of its partners were reduced-schedule associates and counsel. The firm had previously noted that roughly 20% of attorneys promoted to partner over the past five years were part-time-track lawyers.
Meanwhile, firms are increasingly embracing the revenue-generating power of well-managed nonequity tiers, best exemplified by the success of Kirkland & Ellis over the years.
“You have to remember most of these promotions are into salary partner not equity partner,” legal consultant Brad Hildebrandt noted. “There is a realization that firms haven’t been doing enough promotion over the last 10 years. But the track to equity partnership I don’t think is getting any shorter. It’s still hard.”
Finally, others point to the talent war—a partial, albeit less influential, factor—as another driver of these large class sizes. With demand ratcheting to levels not seen in years, law firms are pulling out all the stops to retain and attract attorneys, if only to have more bodies to work on matters brought in by rainmakers.
“If you don’t make somebody a partner, they can move for a lot more money or go somewhere else. We see that happening in the market. You spend all this time and money training people. Then you lose them,” Zeughauser said.
Even still, Macrae recruiter Rachel Nonaka says law firms are still holding potential partner candidates to stringent standards when going up for promotion.
“There was a period of time when firms were more conservative with their partnership classes,” Nonaka said. “But again, these are business decisions. It is still extremely hard to make partner at these firms.”