Biglaw, Partner Issues

More About Making Partner At Sullivan & Cromwell (Part 2)

Is the partner track getting longer at the elite firm?

By  
on

climbing corporate ladder making partner partnershipWe’ve written quite a bit about partnership prospects for women at Sullivan & Cromwell. It’s a controversial subject, and S&C has both its critics and its defenders (note the multiple UPDATES to Wednesday’s story).

But some readers feel that we’ve missed the boat on the S&C partnership track. Here’s what one reader wrote to us:

A bit disappointed by your coverage of S&C partner announcements (where I’m an associate). The diversity line is an easy cudgel and clickbait, I get it, but there’s actually something more interesting going on here.

Only one of five partners made were in the traditional 8/9th year associate to partner track characteristic of traditional Biglaw. While that model is dead at most firms (two-tier partnership, de-equitizations, etc), the stalwart NYC firms (Cravath, Wachtell, Cleary, Davis Polk, Paul Weiss, Debevoise, etc) have managed to hang on and retain it. I wonder whether this year’s announcement at S&C signals the end of this era for the firm or is simply an aberration (one cannot generalize too greatly from a single year, of course).

Ultimately, in a world of $5MM profits per partner it probably makes sense to give eighth-year associates a couple years as special counsel to see if they are equity partnership material before bestowing upon them a lifetime membership, but it would be great if the firm were a bit more transparent in how it was thinking about these type of questions.

The traditional model is, in my opinion, the classiest way to run a partnership. It typically involves a single-tier partnership, with all partners as equity partners, and most promotions from the associate ranks, within a fairly standard (and not ridiculously long) period of time. It often involves lockstep or mostly lockstep pay for partners (although there are exceptions, such as S&C). For a detailed look at this model, see our prior post, Biglaw: It’s Not All About the Benjamins.

Alas, this model has grown less prevalent over the years. In 1995, about two-thirds of law firms had a single-tier partnership structure. By 2009, that basically flipped (and then some), with about 75 percent of firms with 100 or more lawyers having a two-tier system (equity and non-equity). In 2016, it appears that just 18 of the Am Law 100 firms have single-tier partnerships.

Is the partnership model evolving at S&C? Back to our tipster:

S&C’s “special counsel” role traditionally included two categories of people — specialists for whom partner track didn’t make sense (ERISA, antitrust, environmental, etc) and laterals, whom the firm would refuse to make full partners (my impression is that their comp is similar, but they aren’t involved in firm management).

This has broken down in recent years. First, we’ve made some notable exceptions and hired true lateral partners (examples include Nader Mousavi [from WilmerHale] and Michael Torkin [from Shearman & Sterling]). Second, we’ve increasingly made special counsels in core practice areas (examples include John Anselmi, Matthew Peller, Brian O’Reilly, Tracey Russell, and others).

So from where I sit, the partner model of 8/9 years associate to equity is changing too. The firm has said nothing on this, but it’s hard to read our partnership class (making a bunch of special counsels partner and only one true associate to partner) otherwise. This would in many ways bring us in line with the market, but would be a meaningful change for S&C….

On the one hand, “traditional Biglaw business model is dying” isn’t a particularly novel story. But on the other hand, when firms like S&C begin to structure themselves more as traditional businesses and less like simple, single-tiered professional partnerships with an associate class, that is interesting. And it’s interesting at S&C because I doubt that simplistic concerns about money or PPP optics are driving it in the way they would at another firm.

Sponsored

At this point, it’s too early to say that S&C is changing its model for partnership promotion. It’s fairly typical, at both S&C and other firms, to put lateral hires — such as lawyers coming from other firms where they weren’t partners, or lawyers coming out of government — in the “special counsel” holding pen for a little while (even if they’ve been out of law school for a decade or more). This makes sense; it’s a way for both the lawyer and the firm to see how they like each other before making the long-term commitment of partnership. For lawyers who have never worked at S&C or who haven’t worked at S&C for years (such as lawyers who started as associates at S&C, left for government, and returned much later), such a trial period makes sense.

So the focus should really be on “homegrown” Sullivan & Cromwell associates who started their careers at the firm, rose through the ranks, and went up for partner. As to these folks, it seems there hasn’t been any major change, at least if you take a longer view (looking beyond this latest class). A source at the firm said that — excluding laterals, both “true” laterals and lawyers who left S&C for other opportunities (like government) and returned — if you look at S&C’s new partners from the past ten years, their average time at the firm is between eight and nine years. That fairly short period suggests that most partners are coming from the associate rather than special-counsel ranks (because eight to nine years isn’t a long enough period to make special counsel and hang out in that role for a while).

Still, it’s striking that the most recent S&C partner class featured four special counsel and just one associate. Is this an outlier, or the start of a trend? Time will tell.

We enjoy doing these deep dives into the inner workings of Biglaw firms — but we need your help in order to do so. If you have an interesting story that needs exploring, please email us or text us (646-820-8477), and we’ll look into it. Thanks.

Earlier: More About Making Partner At Sullivan & Cromwell (Part 1)
Sullivan & Cromwell’s New Partners: Impressive, Yes; Diverse, Not So Much
Stats Of The Week: The Last Of The True Biglaw Partnerships
Biglaw: It’s Not All About the Benjamins

Sponsored

DBL square headshotDavid Lat is the founder and managing editor of Above the Law and the author of Supreme Ambitions: A Novel. He previously worked as a federal prosecutor in Newark, New Jersey; a litigation associate at Wachtell, Lipton, Rosen & Katz; and a law clerk to Judge Diarmuid F. O’Scannlain of the U.S. Court of Appeals for the Ninth Circuit. You can connect with David on Twitter (@DavidLat), LinkedIn, and Facebook, and you can reach him by email at dlat@abovethelaw.com.

Topics

, , , , , , , , , , , , , , , ,