Law firms tout bumper crops of new partners amid talent war

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REUTERS/Toru Hanai

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  • High demand and robust profits are fueling bigger partner classes
  • Promotions may help convince attorneys to stick around

(Reuters) - It’s a good year to be coming up for partner at a large law firm.

Thanks to record profitability combined with cutthroat battles for attorney talent at major firms, at least five firms are promoting their largest groups of new partners on record. And it’s still early in the season.

With firms straining to hold on to senior and midlevel associates, the promotions are both a reward for those promoted and a signal to others that the brass ring is in reach if they stick around, according to legal industry experts tracking the firms' moves.

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“A lot of firms are thinking, ‘Look, we’ve got to loosen up on getting more equity partners—at least for a little while here—so that we create an incentive for people to stay,’” said James Jones, senior fellow at the Center for the Study of the Legal Profession at the Georgetown University Law Center, while acknowledging that not all of this year's new partners will enjoy equity status.

Kirkland & Ellis promoted a record 151 partners, up from 145 the previous year and 97 five years ago. Latham & Watkins this year elected 44 new partners, up from 33 in 2020.

Bryan Cave Leighton Paisner’s 25-member new partner class is also its largest ever. McDermott Will & Emery elevated 41 new partners, compared to 37 and 28 in 2020 and 2019, respectively. Gibson Dunn & Crutcher promoted seven more attorneys than last year, and Akin Gump Strauss Hauer & Feld promoted its largest new partner class in nearly two decades at 18.

White & Case elevated a record 59 associates—nearly 48% larger than 2020’s class. “We are investing in our people for the long term,” said chair Hugh Verrier in announcing the promotions last month.

Law firms aren’t letting associates jump the line for partnership, said Lisa Smith, a law firm consultant with Fairfax Associates. But they are promoting a larger number of associates already at the front of the line.

“Where they might have pushed somebody off for a year or two in previous years, that’s not happening as much,” Smith said.

Firms are desperate to hold onto their talent: Legal data intelligence provider Leopard Solutions said this week that lateral movement at what it described as the top 200 law firms between August and October 2021 nearly doubled from the same period over the previous three years.

It remains to be seen whether this new partner boom will last beyond 2021. Firms already face ballooning associate compensation costs, and the industry's business model assumes a high associate-to-partner ratio. An especially big blow to partner profits could be coming if demand cools off.

“When the economic cycle turns, will firms have too many people and not enough work to go around?" said law firm consultant Kent Zimmermann, with the Zeughauser Group. “Probably. It’s just a question of when.”

Read more:

Kirkland & Ellis partner class hits highs after lucrative year

Law firms had another big quarter, but associate pay is taking a toll

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Karen Sloan reports on law firms, law schools, and the business of law. Reach her at karen.sloan@thomsonreuters.com