Reply to Law firms now demoting partners .

Forum Index » Jobs and Careers

Reply to "Law firms now demoting partners . "

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]De-equitization of partners isn't a new trend, but rather has been going on for years behind the scenes.  Older partners are slowly de-equitized in order to free up that equity for younger folks who want to join the ranks.  Firms don't necessarily want to grow their outstanding equity.  Rather, they would prefer to keep the same number of equity partners so that everyone is generally happy.  Likewise, de-equitization isn't a sudden event - it is often preceded by years of declining billables and business generation.  In most cases, the older partners know it's going to happen, but that doesn't necessarily make it any easier from a psychological standpoint.[/quote]

How does it happen in reality? Do they take the old guy to lunch and then tell him they're de-equitizing him? Are they allowed to do it at will? [/quote]

This depends on the particular firm's partnership agreement, but generally it would require a vote of all the partners or perhaps just a vote of a management committee.  In more genteel firms, this would be handled "softly" by encouraging a partner to agree to de-equitize.  But, the trend is towards just a committee vote.  But, agreed with the previous poster that this happens slowly at most firms.  It usually follows years of underperformance or low profitability.[/quote]

For older partners, it often happens due to firms' mandatory retirement policies.  [/quote]

Yes, that's true.  I assumed when we were discussing the "trend" of firms de-equitizing partners, we weren't really talking about mandatory retirement ages, but we were talking about pushing out underperforming partners.  But, you're right, many partnership agreements contain mandatory retirement policies.[/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics