Biglaw firms with single partnership tiers are now few and far between, with more big-name firms showing that they’re ready, willing, and able to welcome nonequity partners to their ranks.
Cravath was one of the first longtime holdouts to cut bait and create a “salaried partner tier” (i.e., nonequity partners) back in November 2023. That move gave other highly ranked firms permission to tread the same path, including Paul Weiss, which announced its new two-tier partnership plan in March 2024; WilmerHale, which added a nonequity partnership tier in August 2024; Cleary, which announced its own new partnership platform in October 2024; and Skadden, which began considering a nonequity level in February 2025. Now, Schulte Roth & Zabel is announcing an income partnership tier.
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According to the American Lawyer, revenue and profits per equity partner at Schulte “surged” by double digits in 2024, and the Top 100 firm decided that it was time to move forward with a two-tier partnership, adding 12 new income partners to its roster in January 2025. Here are some additional details:
Nonequity tiers have helped many other firms quickly grow in scale and profits. But in an interview about its financial performance, Schulte co-chairs David Efron and Marc Elovitz said the firm will not try to be “everything to everyone,” and thus its smaller comparative size is something the firm wants to maintain.
“We studied it [a nonequity tier] for a long time, and it wasn’t a knee-jerk reaction,” Elovitz said. “It is very tailored to us and our circumstances. We don’t have an expectation of a growing group of income partners. We do want to increase opportunities for people, both internally and for laterals.”
Biglaw firms are making major moves on partnership and compensation in order to recruit and retain rainmakers and to calm dissension within their ranks — and we can expect more firms to follow the leader in the years to come. According to the 2024 Client Advisory from Hildebrandt Consulting and Citi’s Global Wealth at Work Law Firm Group, 83% of Biglaw firms expect to increase the size of their income partner roles in the next two years.
Is your firm planning to move to a black-box compensation system for partners or increase its nonequity partnership ranks? Please please text us (646-820-8477) or email us and let us know. Thanks.
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Schulte Creates Nonequity Tier, After Revenue Climbs 13.5%, PEP Jumps 24% in 2024 [American Lawyer]
Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Bluesky, X/Twitter, and Threads, or connect with her on LinkedIn.