The Reality of Non-Equity Partnership

Lawyers at all levels of practice can be valuable members of the profession and can find satisfaction in their work.  That is a given, and the decision where you want to fall along the gamut is up to you.  But, before you put that decision in motion, be sure that you understand the terms.  For law firms, that includes being familiar with the ins and outs of non-equity partnership.

Non-equity partnership sounds good to many young lawyers who think they understand the demands of equity partnership and want something less. The thinking goes something like this:  I will still have an interesting practice.  I will have a great title.  I will make a lot of money.  And I won’t have to deal with as much client development, business promotion, and other firm management stuff that I really don’t like anyway.  So, what’s the downside????

Exactly, what’s the downside?  Although that line of reasoning may be good in theory, reality is a much better playing position when you are dealing with your career and your future.

So, it is a good idea to understand what non-equity partnership is, what it is not, how it came to be as popular as it is today, and who benefits most from it.

Those issues and others are covered in a recent article on Above The Law.  And the truth about non-equity partnership may not be all that you thought it would be.

As explained in that piece, the currently-popular two-tiered partnerships are made up of a junior class of  non-equity “partners,” who are paid set salaries, and the traditional inner circle of equity partners, who split the firm’s profits.  The rationale behind the creation of the non-equity group is to reward ambitious lawyers before they tire of the entry-level title of “associate” or other equally unsatisfactory monikers and look elsewhere.

Sounds good, right?  The firm is looking out for the junior talent. 

Maybe.  But, what is not so obvious is that the promotion to non-equity partner also allows the firm a justification to significantly raise hourly rates for this new class of “partners,” and the profits from that bump up goes to — you guessed it — the equity partners.

In fact, as further pointed out, the name change from “senior associate” or  “of counsel” or “counsel” or “special counsel” to “equity partner” is really a misnomer.  There is nothing in terms of traditional partnership about non-equity positions.  Sharing profits has always defined partnership, and there is no trace of that in the non-equity experience.  Clients don’t seem to notice and, as long as young lawyers do not care who profits off of a name change, it will continue.

But, there is more to think about.  The title also may negatively affect the futures of young lawyers in terms of mobility.  Titles can be misleading when it comes to market opportunities, and that can impact careers.  Be sure not to miss that part of the discussion.

And to educate yourself even more on the issues surrounding non-equity partnership, do not miss this article in the American Lawyer, which helps to sharpen the focus on conversations that are becoming necessary to eliminate the confusion and address the important issues about talent, opportunities and the futures of young lawyers.

Check out these articles and do not get blindsided when it comes to the subject of non-equity partnership.

 

 

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Young Lawyers of the Sandwich Generation

I know a little bit about the Sandwich Generation. 

I was 30 years younger than my mom, and, at the same time that she was becoming aged, my own two children were teenagers.  It seemed like everyone needed help — or tending — and I knew that I had to find a way to be there for my mom.

So it goes.  If you ever have found yourself in that situation, you know that you are caught between two devotions just like a big ole piece of bologna is caught between two delicious pieces of bread with no way out.  Not enough time to do right by anyone — or it seems — and, to boot, you have a job.  A responsible and serious job that you need to pay the bills and provide what you want for your kids, but you still want to care for mom, who cared for you so long ago.

The Sandwich Generation, which is more a feeling than a single generation identity, affects more women than men.  This is not surprising because women have proven themselves to be such grand caretakers.  We are naturals, and we are not always very forgiving of those who do things differently than we do.  Especially when it comes to caring for loved our ones.

This is an important subject because the challenges are a function of time — time that we often feel we do not have.  And now that the elderly are living longer, many young lawyers can expect to care for their elders a lot longer.  Welcome to the Sandwich Generation.

As pointed out to me recently, we talk a lot today about Millennials and Baby Boomers.  But when do we start paying attention to the needs of the Sandwich Generation?

Here’s a link to a slide show you need to see.  Watch it and pass it on to your colleagues, your partners, and your employers.  At some time or another, you all will need help figuring out the challenges of the Sandwich Generation.

And, in case you are wondering, law school did not cover this!

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Women Lawyers Could Use Golf “Fore” Business

This is where I tell you to do what I say and not what I do.  I am not a good example of what I am about to tell you.

I was raised in a family of golfers.  My grandfather was a par golfer plus and designed a few courses.  He taught my mom to play golf when she was a teenager — long before there were many women on the links.  My mom was a good golfer, better than my dad, if truth be told.  She loved the game and played at least three days a week during the summer.

I learned to golf when I was in grade school, and I got pretty good at it during high school.  I played a little after I went to college and then less after I got married (to someone who did not appreciate golf) and even less during law school and after I started to practice law.  After all, golf takes time.

That was my rationale for belonging to a golf club but never playing the game.  Stupid.  Even more stupid was not playing in the annual law firm/client golf tournament because my game was a little rusty by then.

So, when I read the article by Vivia Chen in The American Lawyer about why women lawyers should play golf to improve business opportunities, all I could do was sigh.  For all the bad golf decisions of my past.

In my defense, however, I do recall having at least one lucid moment on the subject of women and golf.  In Best Friends at the Bar:  What Women Need To Know about a Career in the Law, I included information about playing golf as a good business development tool in the chapter titled “Find a Comfort Zone for Promoting Work.” 

However, I took heat from some of my readers for embracing a “male-oriented” makeover for women that does not capitalize on typical “women’s strengths.”  That book was published in 2009, and it is now 2019.  What I tolerated as justifiable criticism then, has little relevance now.  I think we have moved on from “typical” gender stereotypes in the last decade.

So, consider golf.  Or, better yet, take up the game.   A lot of business is done on the golf course.  And, presumably, you want a piece of that action.

And, according to the article, this is why you should:

  • Because so few golfers are women (24%), any woman who plays gets special attention;
  • Golfing is a great place to network for business;
  • Men don’t worry about how well they play so why should women; and
  • It is not about whether you enjoy it.  It is all about doing what’s effective to enhance business opportunities.

So, as stated at the end of the article, “Are we dumb?”  I was.  But you can be smarter.

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What Happens When Women Rule?

I never have met Swanee Hunt or, more accurately and respectfully, Ambassador  Swanee Hunt.  She is the former US ambassador to Austria, the founder of the Women and Public Policy Program at the Harvard Kennedy School of Government and the founder of Seismic Shift, an initiative dedicated to increasing the number of women in high political office.

We share a mutual very good friend, but I keep missing Ambassador Hunt at events.  I hope that changes one day soon because we both are dedicated to advancing women in positions of leadership.  And I would like to thank her for her work.

In a recent piece for CNN News, Ambassador Hunt discussed the advances that women are making in increasing their collective representations in Congress and state legislatures in this country and in national representations in countries across the globe — countries like Iceland and Rwanda and New Zealand, where the female Prime Minister is shaking things up Down Under.

The message is that female leadership matters and not just for issues affecting women.  New organizations are springing up all over the US to encourage women candidates and to build on the momentum.  Women demonstrate remarkably effective leadership skills, and they work hard and relentlessly for positive change.  Women, especially those with children, are incredibly efficient and productive on the job.  They have the assembly line down pat.  They multitask with perfection, and they are unflappable under fire.  You can’t show them emotions they have not addressed and overcome.

However, before we get too comfortable with the rise of women leaders, we need to understand that, according to research by Bright Horizons, more than forty percent of employed Americans (a combination of men and women) consider working moms to be less devoted to their work.  And the unfortunate reality is that women fall behind in earned wages once they have children, and they never catch up.  The Motherhood Penalty is still very much an impediment to the advancement of women in the workplace, and the law profession is no exception.

Many more of you than ever before will become law firm partners, but many of you will remain non-equity partners because of your family choices.  You will watch your male colleagues overtake you in salary and opportunity — in many cases not because of your lack of skills but because of perceptions.

This is the way it is — but not the way it needs to be.  Hopefully the trends in the leadership of women that Swanee Hunt writes about and has witnessed all over the world will make a difference.

Let’s hope so.  And soon.

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The Dangers of Leaking Young Lawyer Talent

For more than a decade I have been urging law firms to retain and advance the talent of women lawyers.  The three-book Best Friends at the Bar series has been my effort to spread those messages, and most recently I have expanded my work to include cautionary messages about ignoring and losing the talent of all young lawyers — men and women alike — in What Millennial Lawyers Want:  A Bridge from the Past to the Future of Law Practice (Wolters Kluwer/Aspen Publishers 2018).
 
Those books and the hundreds of blogs and articles I have written and speeches I have given include discussions of the many reasons why our institutions must change to become more inclusive of young people, starting with “the right thing to do” (which is almost always overlooked as a compelling reason) and ending with the sacrifice of future leadership (which should raise huge red flags).  Simply speaking, even if equity and fairness do not win out as arguments for change, the future of the profession should be cause for concern.  You would think that would get some attention, but you may have to think again.
 
I admit to getting discouraged every time I see yet another article on these subjects.  The most recent one appeared in Financial Times earlier this week, and you can read it here.  It is a good article on the problem of leaking law firm talent in the UK, and it echoes what is going on this side of “The Pond.”  But … you have heard it all before.
The article includes arguments like:
 
  • Law firms need to reshape their cultures, moving away from “rigid” traditions and “excessive” hours so they can retain more women and attract millennial lawyers;
  • The current shortage of talent needs to be addressed as increasing numbers of young lawyers abandon private practice; and
  • More than one in five young lawyers have transitioned out of private practice to in-house positions.
The conclusion from what appears to be the continuing need for this article and so many like it is that current law firm leadership is tone deaf on the subjects.  Current leadership is not willing to tackle law firm reform with the kinds of changes that address retention — like workplace values, work-life balance, and billable hour requirements — because doing that might impact client retention.  In other words, current law firm leadership too often cares more about money and power than anything else.  And there is no question what comes out on top when development of future law firm leaders is in competition with the high demands of clients.  Someone has to pay those big salaries at the top.  The careers of young lawyers and succession plans be damned.  Current leadership won’t be around to care.
 
 
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More on the Negative Effect of Greed on Women Lawyers — And Men

The New York Times article that I discussed in last week’s blog is worthy of your attention.  The examples used are of husband and wife lawyers, who are struggling to raise young children.  The upshot is that one parent — typically the female — has to make sacrifices such as cutting back to part-time status, giving up promotion opportunities, and making far less in salary to make these situations work.  This is the current reality despite the fact that American women of working age are the most educated than ever before.

The statistics are all there to make you feel really depressed — and they will have that effect.  In the past, we have focused on causes like discrimination and lack of family-friendly policies in examining the effect on the careers of women lawyers, but this article cites evidence that we should not be looking at gender alone.  The culprit, according to the author, has nothing to do with who has a Y chromosome.

The culprit is corporate greed.  Greed that manifests in long, inflexible hours and winner-take-all attitudes that more often than not “flatline” the careers of one member of a couple — more often than not the women.  Add to that the fact that working 50% more hours often results in 100% more salary.  As the article points out, it is not a linear comparison, and the extra money is very important to a young family.

Although it is not just the law profession that is guilty of short-circuiting talent in this way, it becomes clear that the law profession is a leader in the shift from a reasonably-oriented service industry mentality to a culture of money, power and greed.  The important question is not who is to blame but, rather, what can be done about it.  As you will see in the article, the answer lies in worker demand and significant challenges to management.  More predictable hours and flexibility in when and where the work gets done are good places to start.

But, the goal is not to create ways to allow women to work the same long, inflexible hours as men.  As expressed by one on-line comment to the article, “No one should be doing this.   A father working constantly is not a good father or partner. Or person, for that matter. Probably not healthy either. . . No wonder this country is a mess. We’re working ourselves to a literal and existential death.”

 Hear, hear.  It is a “systems problem” and, as I have written in What Millennial Lawyers Want:  A Bridge from the Past to the Future of Law Practice, law employers have great incentive to change the workaholic cultures they have created.  It is a total sea change that is called for not a temporary fix.  And it needs to come as soon as possible before we lose more talent than our profession can afford.

Here is my favorite quote from the article:

“Women don’t step back from work because they have rich husbands… They have rich husbands because they step back from work.”

There is a lot to think about there.

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Advice for Millennial Lawyers

Earlier today I was the presenter on a webinar for Thompson Reuters/West on “What Millennial Lawyers Want.”  It was a 65-minute program and contained a lot of good information on millennial lawyers, how their behaviors and expectations have developed, the responsibility that parent generations and society have in influencing that development, the values that are common to millennial lawyers and Greatest Generation lawyers, and the roles of millennial lawyers and law firm leaders in a shared solution to the Generational Divide.

Admittedly, that is a lot of content, but it was a long program!  That is how CLE works — you put in the time, and you get the credit.  Unless you are trying to get CLE credit in NY, and then you need a special code — because it is NY, right? — and I made sure I repeated that code twice!  Only in NY!

The makeup of the audience is not information that is shared with presenters prior to the program, so I have no way of knowing if any of you were listening.  But, if you were, I hope you enjoyed it.

Here is a sampling of program content on the topic of what millennial lawyers can do as their part of the shared solution:

  • Be realistic in your expectations and less sensitive to criticism;
  • Overcome your need for constant attention;
  • Get off social media and concentrate on becoming the best lawyer you can be;
  • Become more confident about your choices and decision-making — in other words, don’t take a vote before you take action;
  • Get out of your comfort zones and take on challenges and risks to advance your career and your team;
  • Understand that you do not have all the answers and LISTEN to the wisdom of lawyers who have been in the trenches for more than your lifetime;
  • Dialogue with respect at all times; and
  • Have PATIENCE.  The profession of law is inherently deliberative and slow moving most of the time.  It is no place for expectations of instant gratification.

This list may have you feeling like you are being singled out for bad behavior.  Not so!  You should see the TO DO list that I presented to law firm leaders to become responsive to the values of Millennial Lawyers and safeguard talent.

If true leaders emerge, it will result in a remodeling of law firm cultures.  And it is about time for that!

 

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The Trouble with Women Lawyers — OR Is There Trouble?

I have just returned from a reunion with 14 of my college girlfriends.  We get together as often as possible — traveling from both coasts and points in between — to make sure that our friendships remain kindled and that we provide support to one another as our journeys through life ebb and flow.   These times together never disappoint, and we always leave planning the next one.

This is my way of reminding you that I am and always have been an advocate for women, dating back to college when we all needed each other’s support dealing with our new-found independence and all it entailed.  However, along my road from law school to law practice, I have encountered women, who have tried hard to undermine me and negatively affect my professional progress.  And I am not alone.  I have heard similar stories from many of my female colleagues, and I have witnessed this kind of negative behavior among women professionals.

That is why I remind women lawyers as often as possible of the words of former Secretary of State Madeleine Albright when she said, “There is a place in HELL reserved for women who do not support other women.”  I have met Secretary Albright and discussed those words with her in the context of women lawyers.  As the mother of women lawyers, she was a quick convert to the cause.

However, recognizing that some women do not treat other women well does not mean that I buy into all of the women bullying women stereotypes.  I know too many wonderful and supportive women lawyers to ever go down that road.  But others have, and it is a slippery slope.

In a recent blog from my friend Andie Kramer and her husband Al Harris, whose Andie and Al blog series addresses issues like gender bias that affect women in the workplace, it was not at all surprising to find Andie taking on other authors on the subject of women’s bias against other women.  Andie is a great supporter of women, and she is a contributor to two of my books in the effort to improve conditions for women lawyers.  The fact that she refuses to buy into alleged female stereotypes about women victimizing other women was predictable, and she does it so well.

Rather than rely on negative messages about the societal or evolutionary or internal antagonism behind distinctive female characteristics of hostility by women against women,  Andie and Al challenge those assumptions and beliefs by focusing on what they believe is the real cause for negative behaviors in the workplace —- the workplace itself.

Here is a sampling of what you will read in the blog:

Women’s and men’s behaviors depend not on distinctive female or male characteristics but on the situations in which they find themselves: what they are asked to do, the conditions under which they are required to do it, and the expectations of how they will perform while doing it. Women’s difficulties with other women in the workplace have little or nothing to do with women’s evolution, socialization, or internalized misogyny. They have everything to do with the dynamics of the environments within which women are working. In other words, it’s not the women, it’s their workplaces.

Women helping women and eliminating the toxicity of legal work spaces are major themes of the Best Friends at the Bar project.  I hope that you will join me in these efforts and that you also will keep up with the Andie and Al on their website  to gain perspective on gender bias and related issues.  And I am sure that their new book on these subjects will be illuminating for all of us.

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