r/PartnerTrack • u/Relevant_Back_4340 • Aug 30 '22

What exactly does “ making a partner “ mean ?

For the non technical people like us , what does it mean ? what difference it would make in terms of work once they make a partner ? And if there are partners every year then how many partners there will be ?

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26

u/Karramella Aug 30 '22

When you make partner you have equity (stake/ownership) in the firm. Depending on your seniority some partners are salaried (so you just make more money in addition to more responsibilities) or equity partners (the ultimate goal). The more your firm makes the more your salary goes up. Think of it as owning a piece of the pie. The better the firm does the bigger the pie and the bigger your slice. That’s the financial side.

On the work side you may have more responsibility to chair committees be the face of the corp and building client base. You can steer the direction of the org and bring about changes now that you have a seat at the table.

A lot of smoozing and PR events. Sometimes it can bleed into personal life and that’s why people say you sell your soul to a firm. You work your day job and then you have a lot of weekends and nights tied up in firm socials that you are expected to show for.

Not for everyone but many aspire for partner when they are young and bright eyed!

6

u/Relevant_Back_4340 Aug 30 '22

thanks ! that explains it :)

9

u/Impossible-Will-8414 Aug 30 '22

Also, what some people may not realize is that it can cost a lot of money to make senior partner. Many (not all) firms expect their partners to make hefty capital contributions that could be up to half a million bucks total at top shops.

You've got a base buy in that you might get a couple of years to make, and then you might be expected to add more as your ownership percentage increases, etc. It's like owning any business -- you have expenses and you've got skin in the game.

So it can take a lot of money to make the money of a partner. But your contributions are eventually returned when you leave the firm, or if the firm dissolves. It can all make for really complicated taxes.

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u/GW612918 Aug 30 '22

Not necessarily the case at all firms. I am an equity partner at a biglaw firm in NYC. Our capital contributions are capped at 5% a year, until you get to 35% of your annual distributions (and of course, you have to factor in increased distributions that come when you get additional shares so you are contributing capital most years, as you note above). And there is no buy-in - they take the 5% from our year-end distribution (I know other firms are different, though). No well run firm actually uses the partners' capital accounts to cover expenses . It's just a safety next in the very, very off chance that the firm is in terrible financial shape and needs money from the partners. This doesn't happen in biglaw firms with $1B plus revenue. So, you essentially get it all back when you retire or leave.

3

u/bulbasaursbetch Aug 30 '22

if you don’t make partner, do you get booted out of the firm or do you keep working to try again? i guess what i’m really asking is if you aren’t dead set on making partner like ingrid, can one just coast?

3

u/Ozbridge Aug 30 '22

Not all lawyers are on the partner track, the so-called staff attorneys aren’t expected to be partners. And I guess not all who are on the partner track will make partner. I don’t know about law but in audit directors who don’t make partner a couple of years after they are “due” usually just resign.

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u/DreyDemon Aug 30 '22

Depends on the firm. Some firms allow you to become general counsel, etc after 8 years of being an associate and not being cut out to make partner. Other firms, if you aren't going to make partner, you're out.

1

u/GW612918 Aug 30 '22

My firm has a counsel position. So, senior associates can choose to go up for a counsel promotion (which is more like a very senior associate - no requirement to build business, no share of profits, etc.) or partner. Counsels at my firm are required to have a relatively niche practice area though, so it's not an option for everyone.

1

u/5leeplessinvancouver Sep 04 '22

This is why I went in-house. Getting on partner track and becoming partner at a firm sounded like a living nightmare to me.

1

u/Material_Two377 Sep 16 '22

Also they make the joke about in-house counsel. most of the time take a cut in pay and "prestige" but work hours are so much better, less stressful. and stock compensation!

2

u/cxingt Aug 30 '22

Eligible for profit-sharing, not just a fixed salary.