Kirkland’s Partner Model Takes Over the Big Law Market
Norma Harris, LawFuel BigLaw contributing writer
Kirkland & Ellis flipped the script on law firm partnerships by building a massive nonequity partner tier, now over 1,000 stron, which has let Kirkland promote more lawyers, faster, than most competitors, turning what some once called a “marketing trick” into a powerhouse business mode
Recruiters now have Kirkland’s nonequity partners on speed dial. “They’re hot property,” the partner says. “Even if they’re not equity, getting a Kirkland ‘partner’ is a win for any recruiter or client.”
Criticism of Kirkland’s two-tier, salaried partner model has faded. Now, other firms want in. The move is seen as smart business, not just a trick. Kirkland’s success, and the Wall Street money being paid to some partners in such firms, has pushed other big firms to adopt similar models, making nonequity partnerships the new normal in Big Law.
The word “partner” has lost its old meaning. It once meant you owned part of the firm. Today, it could mean equity, part equity, or none at all.
Despite calls for firms to be clear about who is nonequity, the nonequity tier is now standard. Even Debevoise & Plimpton has joined the trend. They’re following other big names like WilmerHale, Paul Weiss, Cleary Gottlieb, and Cravath.
Rumors say Skadden, Ropes & Gray, and Freshfields are thinking about it too.
A few years ago, Debevoise partners dismissed the idea.
The Non-Equity Rage
The non-equity partner surge sees the promotion of lawyers to nonequity partner at a record pace, making partner status less of a pipe dream and more of a real goal for ambitious lawyers. And that is attractive to younger lawyers.
It gives a title boost, higher rates, and more responsibility, without the stress of equity.
It also helps power profits. Kirkland’s two-tier system means more lawyers can bill at partner rates, fueling the firm’s growth and keeping profits high – something firms are always keen to do.
Kirkland can adjust pay and roles easily, keeping top performers happy and attracting new talent without diluting equity partner profits. That flexibility is a another major drawcard.
In the Am Law 100, most firms now use this model. Only about 10 still have all-equity partnerships. These holdouts—like Jones Day, Davis Polk, Sullivan & Cromwell, Covington, Wachtell, Williams & Connolly, Schulte Roth, Ballard Spahr, and Susman Godfrey—show no sign of changing.
The advantages are clear. For junior lawyers, the nonequity tier makes partner status more reachable.
Evan Parker of Parker Analytics says, “Firms are seeing that nonequity partners are more valuable than they thought. If clients can’t tell the difference, firms can charge more for those partners.”
But is something lost as all-equity partnerships fade? One top U.S. dealmaker says, “Equity is at the heart of what we do. It’s more than money—it’s about being part of the firm. That’s why we succeed.”
There’s still debate. The rise of nonequity partners is a tool for higher profits. Charge-out rates for nonequity partners are rising, but pay is still much higher for equity partners and that too can lead to some potential discord within ‘partner’ rankks.
The tipping point has passed. When nearly every firm uses nonequity partners, it’s no longer gaming the system—it’s just business. Nine out of ten firms are in the game. Soon, all-equity partnerships could be rare as well, but time will tell just how the non-equity partner game plays out. So far, it seems to be win-win.
