"Non-Equity Partner" - Leave It to Lawyers to Come Up with That

 Lawyers are highly skilled with words. Actually the joke is that they went to law school instead of going for the MBA because they were strong verbally but sucked at math. Also, they typically make such a profound investment in matriculating at a top law school, becoming licensed and gaining experience through long hours with what is classified as the "objective" of achieving personal wealth (along with influence and power). 

So, it was predictable that large law firms, constantly ranked in terms of financial metrics such as raw revenue and Profit Per Equity Partner (PPEP), would launch a fresh way of boosting that performance - and name it "Non-Equity Partner" (NEP). Kirkland & Ellis was the pioneer in the concept. As the Bloomberg Law YouTube points out, that's a misnomer. But it sure operates jolly fine as an enhancement for PPEP.  Expose "Servants of the Damned," a book published by David Enrich, also peeks under the hood of the large law firm as a wealth-creating machine, 

Titled "From Kirkland to Paul Weiss: The Rise of the Non-Equity Partner," the video explains that such a designation in a growing number of Big Law firms has cleverly invented an added approach to increasing financials for the equity partners. For instance, some expenses are shifted to the NEP. But the latter don't participate in sharing the actual profits. They are compensated with a salary. The number of equity partners can be kept low. That restricts how many get to have access to the real action. 

So the NEP represents a major advantage for the equity partners. Along with the expense shifting the tier, which acts to retain experienced lawyers who might have left after not being eligible to be equity partners, establishes a pool of well-trained worker bees. The tasks get done and because the worker bee has the title of partner it can be billed at a higher rate to clients than what's standard for an associate. What's not for the equity partners not to love about the arrangement?

What's in it for the NEP? That is, why do they accept this reality? Well, they can do their work without an undue burden of administrative responsibilities. They may prefer the role of worker bee to manager or leader. Also, given the title of partner they can develop new business. 

Along the way they can distinguish themselves through legal achievements and rainmaking to be anointed as equity partner. Yes, they do have a shot at such as promotion. Chair of Paul Weiss Brad Karp has cited that development potential. He positions the NEP as an opportunity to eventually prove oneself as equity partner material. Also, Karp indicates Paul Weiss is simply experimenting with the tier. It's not locked it, as yet. 

In some ways the title may make the NEPs feel better about themselves and in society. There is that title. However, as the video point out, there could be that voice in their heads that they didn't cut it. In coaching junior lawyers they tell me that internally the NEPs know full well they are not up there on the top tier. I published a short short story about the NEP.

Both two lawsuits and the candid input on professional anonymous networks Reddit and Fishbowl have raised questions about the legality and fairness of such a designation. In addition to the cost-shifting there is the matter of zero job security. NEPs are employees, not owners. They can be fired at will.

So much traction has this discontent acquired that there's even speculation it could trigger an interest in unionizing. The odds are of that are not far-fetched. 

Unlike so many associates, these NEP lawyers have a deep bench of experience. They don't do grunt work that can be eliminated by AI. They are needed. They could lateral elsewhere where they do become equity partners. They can branch off and launch their own firm providing a specialized service. 

If English majors were still being produced in numbers in 2025, there could be an underground outcry that the whole NEP continuum is downright Orwellian. That's right down to the language. Remember that "war is peace."

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