Once upon a time, there were two classes of lawyers in law firms: partners and associates. The associates typically came straight out of law schools, worked for 5-7 years under the tutelage of the partners, and then most of them became partners. The ones who didn’t would often end up in-house as clients, so it behooved everyone to treat each other with some respect. The partners shared in the profits and decision-making and were generally at the firm of the rest of their career.
2026 Law Firm Reality
That time is long since gone. Today, partners change firms like prize college athletes willy-nilly transfer to schools offering a better deal. Partners that don’t perform are “de-equitized” and either demoted or asked to leave. And there is a new class of lawyers — the “nonequity “partner.
Nonequity partners are PINOs — partners in name only. They typically don’t share in profits and have no say in decision-making. They are in fact employees of firms, just like associates. The only benefit they get is the ability to hold themselves out as “partners” to clients, itself a sleight of hand designed to make clients think they are getting something they aren’t, a real partner working on their case.
Why the Nonequity?
The profession, er, business, got into this in the great expansion of lawyers that began in the 80s. All of sudden, firms were faced with large classes of associates that were up for partnership. They were also faced with more distinctions in talent within associate ranks. More than that, as the law became more of a business and less a profession, talent was more and more defined as origination of business, profitability, and hours worked.
There was less room for talented lawyers needed to work the cases who didn’t necessarily have business origination skills. But the law firms and equity partners thought they couldn’t afford to lose these “worker bees,” as they called them. Hence a new category that cost the equity partners little.
And there was another factor. Since partners share profits, it stands to reason that the fewer partners to share with, the greater the share to each. All of this culminated in the new nonequity class. Today, it is standard in most large law firms for there to be a large group of these nonequity partners — workers with little voice, who could be fired at will (even in today’s times, de-equitizing an equity partner requires a bit of hard analysis), and who were expected to continue to work like associates to keep their heads above water.
So how’s this idea working out for the lawyers caught in the middle?
So, How’s that Working Out for You?
Equity partners would say this is a good thing. It enables younger lawyers who can’t quite meet partnership standards to not be unilaterally dumped into the job market. It assures them a continued job (at least as long as they perform). It enables the firm to keep the talent they need to serve the clients.
But what do the nonequity partners have to say? According to a recent article, in a flash Law.com survey of 1,345 attorneys, nonequity partners reported the lowest satisfaction scores on questions about compensation, their hourly rates, and their current role in their firms. Associates scored better on all of these categories.
Think about that paradox. It suggests that associates are more satisfied with their roles than the nonequity so-called partners. Thanks for the promotion.
And it’s easy to see why nonequity partners aren’t very happy. Nonequity partners are held to a higher standard than associates. They are often expected to manage associates and their profitability but may not get firm financial information to help them do that.
They have little authority and get little recognition for their efforts. In many respects, they are treated like second-class citizens. In many cases, they aren’t allowed to sit in on partner meetings or if they are, may be asked to leave when financial or important issues are discussed.
One other surprising finding, according to the article, about a third of the sample are required to provide a capital contribution to receive this lofty status, just like equity partners. You have to pay to be in the club, but you can’t use the facilities. You have to pay for a promotion that feels like a demotion.
And it’s getting worse as law firm mergers and lateral partners results in equity ranks being increasingly closed.
For all these reasons, nonequity partnership isn’t beloved by those forced into it. It’s why the concept faced internal resistance when first proposed. It’s also why equity partners kept pushing for it: the math works for them.
The Impact of Nonequity
However one views whether the nonequity distinction is good or bad, it’s not going to change. The real difficulty comes from thinking we are living in the “once upon time” days where there was a law firm culture and workplace family. It’s long gone.
Management has to realize more and more professionals in law firms are not happy. That dissatisfaction impacts productivity and law firm culture, if any such thing remains in today’s “it just business” firm workplace.
The result: just like equity partners, when nonequity partners aren’t happy where they are, they are going to look elsewhere. With the advent of GenAI tools that reduce the learning curve for all sorts of legal work, nonequity partners have more opportunities to either go out on their own (with the word partner on their resume) or with small firms.
So much for keeping talented lawyers needed to do the work who don’t originate business.
The result is increased volatility in the marketplace all the way around. There is less institutional loyalty and less willingness to act for the good of the firm for long-range planning and investment initiatives.
In today’s world, law firms are just a business with players that make business decisions. Maybe that’s a good thing since it reflects capitalism in its basic sense. But the notion of a law firm as a work family is long gone. Thinking that there are any remnants is a mistake for associates, nonequity partners, equity partners, and law firm management. Just like law firms are a business, so are the individuals who work in it, who will also make business decisions.
Want to keep nonequity partners? Better take into account how they view the whole concept.
Stephen Embry is a lawyer, speaker, blogger, and writer. He publishes TechLaw Crossroads, a blog devoted to the examination of the tension between technology, the law, and the practice of law.
