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July 14, 2010 3:21 PM

Send the Elevator Back Down

Posted by Ed Shanahan

By Steven Harper

Kevin Spacey regards late actor Jack Lemmon as a key influence in his life and often quotes Lemmon's famous quote:

"If you're lucky enough to have done well, then it's your responsibility to send the elevator back down."

I was reminded of Lemmon's remark recently as I reviewed The Am Law 100 rankings of the last two years, and read the editors' introductions. It's pretty clear from those results that most large law firm equity partners don't bother to send the elevator back down.

In the 2009 edition of the ranking, the editors observed that since 1999 the number of nonequity partners in Am Law 100 firms increased threefold while the equity ranks rose by only one-third. That was a decade when demand for all legal services surged and large firms, in particular, experienced explosive growth in revenues, head count, and profitability.

In other words, there was more room everywhere--except, apparently, at the top.

The May 2010 issue of The American Lawyer noted that as gross revenue among The Am Law 100 fell, average equity partner profits for the group actually increased to over $1.26 million. How did that happen? Law firm leaders devised a multipronged attack.

First, firms increased productivity--which is another way of saying that some associates lost their jobs so the survivors could bill more hours. Remember Black Thursday in mid-February 2009, when one big law firm laid off more than 440 people (190 associates and 250 staff members) in a single day? Similar actions from other firms brought the attorney layoff total alone to more than 1,100 in a single week.

Second, firms reduced staff, slashed summer programs, deferred or withdrew previous offers to new hires, and cut other expenses.

Finally and less publicly, some firms quietly moved equity partners to income status while putting the brakes on new entrants to the equity ranks. As a result, the number of nonequity partners rose again in 2009. That bulge in the Big Law python now comprises almost 40 percent of all Am Law 100 law firm partners.

Where will they go?

Maybe someday the law firm benefactors bankrolling the National Association for Law Placement (NALP) will allow that organization to gather the data that will tell us where--just as NALP does for associates. You might think that all of the free market proselytizers in large firms would embrace more transparency on a topic of such central importance to law students trying to make career decisions. Think again.

NALP tried, but the organization ceased collection efforts in December 2009 because firms balked at providing it. In April a prominent group of judges, professors, and attorneys wrote a letter criticizing NALP's capitulation. In response, its executive director offered assurances that the board would consider the issue on April 26. Since then, NALP has asked its Form Review Work Group to "focus on the NALP staff's proposal on collecting equity/nonequity partner data." The group had a conference call scheduled for July 6.

Beyond this, NALP's silence on the topic over the past three months has been deafening. Meanwhile, students can look forward to yet another recruiting season without information that should be of critical importance to them.


Steven J. Harper is an adjunct professor at Northwestern University. He recently retired as a partner at Kirkland & Ellis, after 30 years in private practice. His blog about the legal profession, The Belly of the Beast, can be found at www.thebellyofthebeast.wordpress.com. A version of the column above was first published on The Belly of the Beast.

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