What Do Law Firm Titles Mean: Of Counsel, Non-Equity Partner, Equity Partner Explained

What Law Firm Titles Mean: Of Counsel, Non-Equity Partner, Equity Partner Explained

In this article, readers will learn the various law firm titles were given to attorneys mean and the roles and responsibilities usually associated with those positions. They will also learn what kind of person most often fills these jobs.

Harrison Barnes

What does Of Counsel mean?
What is a non-equity partner?
What is a partner/shareholder?

These distinctions (and what you have to look forward to if you are ever made one of them) are discussed below.

Get advice from law students, prelaw students and others at: Top Law Schools

This is what awaits all associates if you are not asked to leave or are fired from your law office after several years of service.

It is important to know what awaits you because it gives you the ability to make decisions about your future. It is also important to understand whether you want to accept one of these positions.

1. What Does Of Counsel Mean?

Of counsel is a role that is traditionally given to attorneys who are in partnership with the law office and others like and want to have around; however, it is reserved for the lawyers who traditionally do not have much business and are also not interested in working extremely hard. This depends on the caliber of the firm, however. Someone who is "of counsel" at Skadden Arps would likely be a partner at a company like Dechert. The quality of the law firm and its competitiveness often determine what types of attorneys are of counsel.

Of counsel is, by definition, an interesting position. It is not a partner, and it is not an associate. The role has a "permanence" about it, unlike the associates. Someone who is "of counsel" in a legal office is generally someone who has been around a while and will also stay around. In contrast, the shelf life of most associates is quite limited. Clients and legal office partners know that the associate is likely to be gone at any time.

The Types of Attorneys Who Are Of Counsel

Here are the types of attorneys who generally find themselves in an of counsel role:

Attorneys Who Do Not Have Business—Or What It Takes to Be a Partner in a Major, Major Law Firm. If your last 14+ years at a company like Skadden Arps and work extremely hard, the odds are very good. They will make you "of counsel." Only legal practitioners with huge clients or who achieve some sort of national prominence are likely to be made partners in a firm like Skadden. If you are not asked to leave after 12 to 14 years, Skadden and similar firms will generally make you "of counsel." This is in a rarefied world. Someone who is of counsel at a firm like Skadden would almost certainly have been made a partner at a firm like Kirkpatrick and Lockhart, Kirkland and Ellis, or White and Case. Of counsel is an excellent "safety net" for outstanding legal practitioners who are not yet ready to be a partner at a major, major law office or who will never be. A legal office like Skadden may pay an of counsel attorney $375,000 a year and bill the same legal adviser out at $750 an hour. It is happy to do this all day long because it is profitable and gives the attorney enough security to remain happy.
Attorneys who do not want the pressure of being a partner in a law firm and just want to do their job and go home each night. There are all kinds of pressures that go along with being a partner that will be discussed later in this article. Many lawyers choose to become counsel after being a partner for some time simply because they do not want this pressure. They consciously choose to make $225,000 a year in a large legal firm instead of the $350,000+ as a partner. An of counsel attorney would much rather just bill 1,800 hours a year and not be evaluated on all of the factors that partners are evaluated on (business generation, collections, outside activities, mentoring, and so forth). I have seen many great attorneys who were law firm partners in a major legal office tell the law firm they preferred to be of counsel. For many legal practitioners, this is a great choice.
Attorneys who are older and may have left the legal office environment to go into politics, in-house, become a judge, or something else and want to return to the legal office. A lawyer may start out his career and work several years at Gibson Dunn & Crutcher or a similar company and even make a partner there. Then, he may go to work for the State Department or something similar for 15 years before deciding to return to the legal profession. Lawyers like this can generally "make a deal" with these firms to come back in an of counsel role. The company will utilize this attorney's high-level government qualifications to impress clients, and everyone will be happy. The lawyer will be given as much work as the firm has to give him (generally, not a ton of work), and much of this work may come from individuals who were contacts of this attorney. Also, the attorney can do work for clients who may flutter from time to time.
Attorneys who are simply very old and do not have the energy to work hard any longer. Many partners eventually start losing steam and no longer want to work long hours and face the pressure of bringing in clients. These lawyers may then decide that they would prefer to, instead, have a less stressful life that allows for the occasional golf game, days off during the week now and then, and regular vacations. If an attorney has put in 30+ years of service at a legal office, it is often more than happy to give law firm titles and steady salary—or an arrangement that gives the attorney a percentage of its billings.
Smart, nerdy lawyers without client generation skills whom the partners in the law office like. There are generally attorneys inside of law firms who are very intelligent—some startlingly so—but who do not have the ability to bring in clients (and in some cases even relate to them). They may be excellent writers, great at catching details in deals, and otherwise exceptional. At the same time, they may not have the best interpersonal skills with other legal advisers in the company and may be more comfortable in their offices with their doors closed. These same legal practitioners are also (quite often) very committed to their law firm titles and loyal to the company. These are great candidates to be of counsel in a legal firm.
Attorneys with various personal demons who have trouble "getting it together" but still do good work. In one law firm I worked in, there was an attorney who was a graduate of Yale Law School and incredibly brilliant. He found himself in and out of the hospital for various psychological demons. The firm—quite obviously—could not make him partner, but he worked very hard when he worked and provided a ton of value to the legal firm. He was of counsel. Others who are of counsel may take frequent time off, be sick, or be injured consistently and otherwise have issues that make it difficult for them to be 100% dedicated to the company.
Attorneys in a legal profession area of the firm that does not have enough business to make it very profitable. Some law firms often get work from time to time to deal with bankruptcy, patent prosecution, trademark, trusts, and estates, or other practice areas. Because the legal firm does not have a lot of work but needs senior people to do the work for important customers, it generally has a lawyer on its payroll in an of counsel role who is able to provide service to these customers when the work comes in. Large legal offices often have trust and estate practices for their larger clients, for example. Still, the money these practices generate is minimal compared to more active law practice groups such as litigation and corporate. Therefore, the highest anyone can often go is of counsel in this law practice group. One interesting fact about these "niche" practice groups is that law firms often significantly reduce their hiring standards when bringing on associates. They do this because they want lawyers who will stay and not be overly ambitious and likely to leave. They want someone who will be happy graduating into a role such as of counsel. Thus, a trusts and estates practice may hire someone from the middle of their class (who is attractive, refined, and has excellent social skills) from a second-tier law school when the majority of them in the company went to the first-tier school of law.
Attorneys for niche management-related jobs inside of legal firms who do not necessarily involve a lot of interaction with customers. Large law firms often have lawyers who do things such as work on conflict checks and negotiate these conflicts with customers. They are often made of counsel, so they have some authority in the legal firm, but this is generally a glorified clerical-type role. In addition, legal offices often have individuals in various administrative positions that they make of counsel. For example, the of counsel attorneys are often made company administrators and mediate various disputes among the lawyers and support staff of the law firm. Other of counsel attorneys may work on collections for the legal office. Some may be in charge of firing individuals and doing exit interviews.
Attorneys who may have a lot of other stuff going on (outside businesses and so forth) and want to maintain a connection with a legal firm. Some lawyers may have outside interests that are very strong. Yet, they want to maintain a connection with a legal firm. I have even seen an of counsel attorney with a major law firm have a side solo legal office practice. Still, other lawyers may be spending a lot of their time teaching law, for example. They are frequently made of counsel.
Women who have left the legal profession for a period of time and then come back. Many women may become partners or maybe hardworking senior associates who left to have children for a time and want to come back to legal practice—albeit on a reduced schedule. Legal offices will often make these women of counsel. The women may voluntarily choose these law firm titles because they need to spend time with their children or have other obligations.
Individuals with political and other ambitions keep them away from the office a lot. I have met many individuals who view practicing law as just a means to pay the bills—their real ambition is politics. Legal firms generally do not have any problems with this. They like individuals who make them look good (and what better way than politics). Law firms will often give lawyers these law firm titles and a lot of leeways when they have political ambitions.

Of counsel is a way for a good legal practitioner to stay involved inside of the legal office and, at the same time, not be as accountable as equity and non-equity partners need to be.

See the following articles for more information:

2. What Is a Non-Equity Partner?

"Non-equity partner" is a relatively recent invention that started to gain popularity in the 1980s. At that time, legal offices were beginning to hire consulting companies and realized there were partners inside their law firms who were not that profitable.

New methods of rating and categorizing partners were suggested, and the practice of having equity and non-equity partners took off.

While numerous firms today continue with the practice of just having one tier of partnership, the non-equity partner is something that becomes more and more common in law firms each year. It is by definition a frightening duty and suggests less permanence in a legal firm than even of counsel. In reality, being of counsel is probably a "safer" position if someone wants to survive long-term inside of a law firm. Being one is like being an associate with the knowledge and added pressure that you are likely to be out of a job within a few years if you do not bring in business.

The Types of Attorneys Who Are Non-Equity Partners

In reality, it is not much different than being of counsel. They mostly:

Do not have significant business
Receive a salary (and not partnership distributions)

The biggest difference between a non-equity partner and an of counsel is that the former is someone who shows the ambition and drives to be an equity partner potentially. They generally have interpersonal skills, are willing to work very hard, and also have good legal skills. They are just not really quite there yet.

Non-equity partners are generally:

People who were formerly associates are now being "groomed" and tested to see if they can fill a real partnership role or
Attorneys who were formerly equity partners but are no longer cutting it and are being given time to get business.

If I had to choose a way to describe this partnership, it would be "secret probation." It is a role that (generally) only other lawyers in the company know about. In addition, it is a role and duty that is not likely to last more than a few years unless the attorney brings in some business.

Many of them are likely to be men with young families who really want to get ahead. They have mortgages, car payments, and other commitments, and the legal firm channels this drive into its growth and survival. Women, of course, are also non-equity partners when they show consistent commitment and the sort of drive that this job suggests—but they achieve this position less often because they frequently start families. People generally become one after years of pressure and billing extreme amounts of hours at a level that is nearly impossible to do for lawyers spending a lot of time with families.

If you go to White and Case or a similar law firm, work extremely hard as an associate, and impress all of the right individuals, at some point in your association with this legal firm, it will either ask you to leave or tell you that that "you are on the right track." (Alternatively, the company may make you of counsel if you are not sufficiently motivated.) If you joined this legal office as a lateral, it will likely not have this conversation with you until you have been there at least three years working your tail off.

I want to be clear that at a law firm like White and Case, it is not easy to get to the point where you are considered for even a non-equity role (you need to be really outstanding). The odds of making a non-equity partner in a large legal firm that hires 60 first-year associates each year is low. Only one or two of these individuals will even be around long enough to be considered for this role. It is not easy.

After a year or two of the legal firm stringing you along, you will be made a non-equity partner. Once you are made this at a very large legal office, the following will happen:

You will be given some money to decorate your office.
You will be given a salary of around $350,000 a year.
You will be told in no uncertain terms "congratulations" but you now need to generate some business.

A whole new set of expectations will fall upon you. You are expected to begin bringing in enough business not only to support yourself but also support a few associates with work and also [hopefully] support some partners and of counsel attorneys in the legal office as well. The point is that becoming a non-equity partner is sort of like being on probation.

The legal office is basically giving you law firm titles as a partner because it wants to make sure that you have credibility with potential customers. The general counsel of a bank will never be as enthusiastic talking to an associate or person in an of counsel position as he is a partner. Thus, the titles are important for you to get business.

The expectation is that you will either rise to the challenge or fail. Regardless, the law firm gives the attorney a vote of confidence and the law firm titles to go out and get business.

An attorney who is a non-equity partner generally does need to get business. While I am not going to get too far into this discussion, they will use all sorts of methods to get business. They are expected to go out into the community to develop business and find ways to bring more work into the company. Not all of them will do this, of course. They can sometimes get around this requirement by latching onto an extremely powerful equity partner with a TON of business which feeds them a lot of work. If this occurs and the powerful partner sticks up for the non-equity partner, he can make a partner with that person backing him.

Each year, the non-equity partner will be reviewed, and the number of hours he billed and generated will be tallied. He may be shown an "average" number that equity partners are generating and told he needs to get to that level if he hopes to make it. If he is still not pulling his weight after a few years of this, he will lose his job or be given another position in the legal firm if he is well-liked enough.

What happens to most non-equity partners who do not make it? Generally one of a few things:

They go in-house, open a solo practice, or take another job. This is the most common thing that they end up doing. They realize that, for whatever reason, they do not have what it takes to be an equity partner—but they are skilled legally—so they decide that they are going to go in-house. This works very well for many attorneys, and I would estimate that this is what the majority of them do. Customers think this is a great deal because they can save money compared to what the same attorney would cost inside of a major legal firm. Given the competitiveness of finding in-house work, many of them get frustrated and attempt to open their own practice. The results of this can be mixed. If the attorney could not get clients with a partner title and major law firm behind him, how is he supposed to do this independently? Fortunately, many of them have substantial savings to support themselves while they figure everything out at this point in their careers. It does not always go well, though—and the entire thing is scary. I've seen many attorneys fail because they have little understanding of getting clients once they open their own practices.
They go to another legal firm legitimately. Sometimes the amount of business an attorney needs to become an equity partner can be staggering—even up to $2 million. Thus, an attorney at a major company with $500,000 in enterprise and good legal skills in an in-demand practice area can be very marketable to smaller firms (or even similar-sized firms with a need). Even with no business, they can be in demand by many larger and smaller firms. They can move to another law firm and carry out their careers elsewhere.
They go to another legal office illegitimately (and start a cycle of moving around while exaggerating the amount of business they have). This is extremely common. As a legal recruiter, I know more attorneys around Los Angeles than I can count who have been carrying on this scam for years.

Here is how the scam works: The attorney may be working at a given law firm and (using a recruiter or otherwise) get in touch with other major law firms. He will represent that he has $1 million or more in business and provides the prospective firm with "fictional" write-ups about how much he billed and collected from his clients over the past several years. He may represent that he wants to leave the major law firm where he is a non-equity partner because (1) there are "conflicts" and there are certain clients he cannot bring in or (2) the law firm he is with cannot support certain clients and he is leaving business on the table.

Incredibly, the world opens up to these attorneys, and they generally get numerous offers from other law firms based on these representations. Because the attorney's business is impossible to verify, the law firm hiring the attorney has to take him at his word.

When the attorney gets to the new law firm, he suddenly represents that some of the clients are not ready to move or that his former firm is "playing dirty" to keep the clients. The attorney may, in reality, have a small amount of work but not much. Unfortunately, the new law firm may have already done press releases and announcements about its new hire. This charade is allowed to continue for one to three years, at which point the new "partner" is fired or asked to leave. These partners generally start looking for a new law firm to fall victim to the scam.

I've seen this happen frequently. This is almost always perpetrated by younger attorneys (in their 30s to mid-40s). Many of these attorneys begin abusing substances, disappear from the law firm for long periods during the day, and they almost always burn out. Some—miraculously—get lucky and snag huge clients. More often than not, though, their reputation eventually catches up with them.

One reason this scam goes on so long is that law firms are generally paranoid about getting sued. Thus, when a partner is leaving or looking for a job, the law firm will say nothing whatsoever. It just wants to be rid of the partner without getting sued.

Another type of attorney likely to become a non-equity partner is a partner who is not making it as an equity partner. Rather than humiliating the partner and voting him out of the partnership, and destroying his career, the legal firm makes him a non-equity partner. For many partners, this is a huge indignity and is very upsetting. It is usually a signal that the person should get another job and move on.

Why would someone be voted down from an equity partner to a non-equity partner?

There are many reasons for this. They generally are:

The attorney is not billing enough hours.
The attorney does not have enough clients and business.
The attorney may have serious performance issues—a malpractice lawsuit, poor work product, or other concerns.
The attorney may have developed various personal problems that the law firm is uncomfortable with (substance abuse, legal troubles, a messy divorce airing embarrassing personal information).
The law firm is at fault and does not have the business to give the attorney that it had when the attorney was made an equity partner.
The law firm has hired consultants who have determined that there should be two partnership tiers.
A younger generation of "hard-hitting" partners with a lot of business has risen up in the firm, wants more profits for themselves, and is lobbying hard to push down people not carrying their weight.
Equity partners are leaving the firm because they are not making enough money and the law firm is under pressure to increase their pay and reduce the pay of nonperformers.

The most common reason for making someone a non-equity partner is generally that the person does not have enough clients. That is almost always the reason why. In any event, once an equity partner is "de-equitized," it sends him a strong signal that he better "shape up or ship out."

Many partners who are de-equitized subsequently become judges, go in-house, take jobs with the government or inside of law schools.

See the following articles for more information:

3. What is an Equity Partner?

Being an equity partner in a large law firm means you are performing at, above, or close to the standard this legal office sets for its partners. Being a partner at a company like Wachtell, Lipton means something entirely different than being a partner at a firm like Baker & McKenzie. The expectations are simply quite different.

An equity partner is generally going to be someone with an excellent reputation inside and outside of the law firm who is more than capable of carrying his own weight. They are able to generate business for the law firm, able to support associates, and able to bill a tremendous number of hours. Being an equity partner in most large law firms means that you have dedicated your life to your career and servicing the law office and its customers. Not only have you dedicated your life to this, but you are succeeding.

View Law Firm Partner Jobs on BCG

The Types of Attorneys Who Are Equity Partners

When you examine what an of counsel or non-equity partner is inside of most law firms, an equity partner is generally everything they are not:

Harder working
More committed
More clients
Fewer problems
Fewer excuses
More ambition
Better interpersonal skills
Invested

All of these things are what make an equity partner. They are generally wholeheartedly and 100% still in the game, trying hard and making every effort to stand out and do well. In addition, most of them will need to be "invested" in the company to be owners. This means that they may have to come up with anywhere from tens of thousands of dollars to several hundred thousand dollars to be "invested in the firm." This is generally called a "buy-in" or "capital contribution." The law firm will generally loan the partner the money for this, or many legal offices have special relationships with banks that do so as well.

What is so interesting to me about them is that all of this is really a product of the demands and expectations of the law firm the person is a partner in. In a law firm such as Cravath Swaine & Moore, which has only one non-equity partner, for example, being an equity partner means something far, far different than being one in a firm like Foley & Lardner. A higher level of commitment, work ethic, intelligence, and client-getting ability is suggested by having law firm titles at a firm like Cravath than it is at a company like Foley and Lardner. In fact, Foley is an outstanding law firm, but becoming a partner at an office like Cravath (and getting a job there even) is entirely different from becoming a partner at Foley & Lardner.

See Related Articles

Being an equity partner also means taking an interest in the "business side" of things. They are responsible for not just doing work, but often for:

Evaluating non-equity partners and associates,
Making financial decisions about when to hire and when to cut back,
Firing people,
Voting to hire new partners and others,
Making decisions about opening and closing offices,
Being responsible for pitching large potential clients,
Making decisions about how to market the law firm,
Making money when the firm does not make money,
Assuming liability for malpractice and other actions against the firm,
Being a point of contact for important firm clients,
Keeping the morale up of associates and others in the firm by portraying everything in a positive light,
Maintaining (or improving) the hiring standards of the firm,
Recruiting other attorneys with business to keep the firm profitable,
Making advertising and promotion decisions about the law firm,
Creating budgets, one- and five-year plans for the law firm,
Supervising the creation of content on the law firm's website,
Assisting public relations for the firm when issues come up,
Negotiating and finding office space for the law firm and supervising build-outs,
Keeping files secure and overseeing the firm's IT department and record keeping.

In general, being an equity partner comes with the management responsibilities of running a company. The average of them is not going to be involved in each of these things – but they will be involved in some.

Most of them need to have something more than just the ability to do legal work. They need not just have the ability to bring in customers; they also need to have a spark and often an ability to inspire those working with them. In addition, they need to take an interest in the practice of law as a business as well. Obviously, this is not something everyone is cut out for.

In order to maintain the position of equity partner, an attorney generally needs to consistently have work to do and keep associates and others ranking beneath them busy. Equity partners are traditionally evaluated based on their contribution to the firm—but can be evaluated on a variety of other factors. Click here for an example of a partnership agreement from the firm Foley & Lardner.

Every partnership agreement is different, and every law firm evaluates and emphasizes different things. Some value business more than others as part of an ultimate compensation formula and others value other types of contributions. It all depends on the given firm.

In general, once an equity partner in a large law firm has a lot of business ($2 million or more) his job becomes very secure. He is very marketable to scores of other large law firms if he is not treated to his satisfaction. It is not uncommon for these partners to continually move every three to five years when they get bored or annoyed with their colleagues. A law firm partner recruiter often helps these types of partners make a move to another law firm. A partner with a lot of clients is usually a "big fish" in the pond.

In general, an equity partner will bill out at a similar rate to a non-equity partner and take home about three times as much money.

See The Top Two Different Ways Law Firm Partners Are Compensated for more information.

Conclusions

Law firms are fascinating environments offering many opportunities for attorneys of different expertise, motivations, and business-getting abilities. Ultimately, the most important thing to rise up the food chain and stay there is the amount of business the attorney has.

See the following articles for more information:

Resources

Take a look at the following list of major firms with a two-tiered partnership (firms with the most non-equity partners are listed first):

Here is a list of firms with just one tier of partnership:

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What Do Law Firm Titles Mean: Of Counsel, Non-Equity Partner, Equity Partner Explained

Harrison Barnes' Legal Career Advice Podcast - Episode 62

Discuss Partners on Top Law Schools

1. What Does Of Counsel Mean?

The Types of Attorneys Who Are Of Counsel

2. What Is a Non-Equity Partner?

The Types of Attorneys Who Are Non-Equity Partners

3. What is an Equity Partner?

View Law Firm Partner Jobs on BCG

The Types of Attorneys Who Are Equity Partners

Conclusions

Resources

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