<p>Hey I just wanted to know how this works. When you're working at a big law firm, how long does it take in terms of years to reach equity sharing partner? I know that it's true that some people will never reach equity sharing partner. </p>
<p>Also, I saw the numbers, around my city the big firms are giving about 500k in terms of profits per partner and was wondering if this is IN ADDITION to your salary, and if so -- how much is that typically. (for instance, a big firm in NY)</p>
<p>Well . . . well . . . the truth of the matter is that different firms do things differently. Many years ago a person made partner by working hard and generating billable hours that far exceeded his/her salary as an associate, and partners divided profits in an equal manner. However, different firms have different systems. Equity does not mean equal at most firms, where different partners earn different incomes. The chances of you making partner may have more to do with if the firm can bill your hours at the partner level and get paid (and of course the reverse is true that if there is not enough work to bill your hours at the partner level you will not be made partner). Thus, whenever you look at a firm you need to ask WHAT DOES PARTNER MEAN IN THIS FIRM. DIfferent firms publish economic data in different ways. When they say profit per partner, this often means the net profit for the year divided by the number of partners. This can mean the income to each partner, but often profit needs to move into other areas like expanding territory that may be a money loser in the first few years. IF your dream is to work your way up in a national firm, my advice is not only to do excellent work and work long hours, but bring in work to the firm. I know this sounds like a hard thing to do, and it is unlikely that you will bring in a big account, but even little stuff (wills, trusts, real estate transactions, ect.) makes you look good.</p>
<p>There are differences among law firms but if you are looking at the large national practice type firms that start new associates at $125,000 or more (and only a small minority of the law school graduates get into those firms), then a typical structure today is as follows: (a) you will be an associate for anywhere from 6 to 9 years; (b) after that, if you meet the standards for partnership and get voted in, you will be made a non-equity partner meaning you will still be on salary and bonus and not getting a share of the profits; (c) four or more years later (and sometimes shorter if you generate large amounts of business) you may be considered for and voted in as an equity partner. Many associates never make partner (and usually leave); many non-equity partners never make equity partner (and often stay).</p>
<p>Those profits per partner figures you see are misleading. They are based on data provided by law firms as to total revenue and total expense, which data may or may not be reliable, depending on firm. Based on those figures, they then try to guess the profits per partner but it is often a difficult task because they usually don't know how many are non-equity partners (and included in expense) or equity. Also, there is no large law firm I am aware of where all the equity partners get the same share of the profits. Shares depend on a number of factors but the biggest factor is busineess generated by the partner. If you see $500,000 a partner that could mean a handful are in the millions and many are down around $300,000, and that figure is not in addition to a salary.</p>