Jim, the practice group leader I was coaching, had sponsored his longtime associate Megan for partnership, and she sailed through the partnership election process. She had always been Jim’s trusted lieutenant, and Jim expected their relationship would continue as before.
Soon, though, when Jim asked Megan to accompany him to a client pitch or handle one of his client’s matters, she either had no time or offered some vague excuse. Megan could now be heard to complain about her compensation, especially about the considerable cost of health insurance (which the firm covered for associates but not for partners). She was becoming both unavailable and disgruntled.
Jim was more than disappointed—he felt betrayed. To him, their relationship went beyond that of colleagues. He had served as Megan’s trusted mentor and now that he had sponsored her partnership, she was no longer there to support him. Back when he joined the firm, he treated his partners as if they were his second family. He gave his all to the mentor who sponsored his partnership. Could it be that Megan was just finally showing her true colors? Just an entitled millennial with no work ethic?
For her part, Megan was floundering as well. As an associate, she was only too glad to serve Jim’s clients needs, but now, she needed to serve her own. She needed to offload some of her previous responsibilities. This firm, like most, had a two-tier partnership system. She recognized she had a limited window to develop her own book of business and advance to equity partner. She watched as increasing numbers of partners were poached by other firms, taking their clients with them. She wanted to secure her future, but she needed a different approach than the path that earned her the junior partnership.
Megan understood, as any savvy lawyer would, that partnerships were not lifelong commitments. Loyalty was no longer their lingua franca; a book of business determined both income and power. With new tax and insurance commitments to pay, she needed a higher income and greater security. Megan needed to focus on her future, which, she concluded, meant she could no longer serve as Jim’s reliable adjunct.
This generational conflict arises more often today. Partners who came of age in the day when partnership was an honor-bound commitment expect junior partners to have both gratitude and commitment to the firm, and many do. But many also recognize that we are in a changed environment: unpleasant as some senior partners may find this, partnerships are now largely transactional.
Only 13 among the 100 largest firms in the country have single-tier partnerships, where all partners earn equity shares. Even blue-chip firms have adopted a nonequity partnership tier, to retain talent and free up profits for valued rainmakers. Lateral moves have exploded for one simple reason: the metrics of partnership value have changed. Few nowadays expect that partnerships are lifelong commitments. Let’s say the portfolio that a partner has at one firm is valued at $8 million. Another firm, trying to expand its practice, values that partner and his portfolio at $20 million. If another firm values your work at triple what your firm values you, the decision to jump ship is pretty irresistible.
A good rule of thumb I often share with leadership: tell me how you pay your people, and I will tell you how they behave. Unless your firm models partnership values—one for all, all for one and one for all—you cannot reasonably expect new partners to adopt them.
This is the unacknowledged schism between how equity partners and many nonequity partners view their respective roles. If partners are paid to bring in business, they will. If they are paid to mentor others, they will. If they are given a decade-long guarantee of financial security to work only on their mentor’s client’s matters, maybe they will. Firms need to decide what they value and how to compensate based on those values.
This is an underlying question of true leadership. If leaders want a long-term partnership, they need to be explicit in their expectations, and they need to model and incentivize those behaviors.
Eventually, with some help, the diverging perspectives of Jim and Megan began to coalesce. Both parties were actually responding rationally to the world as they saw it. Megan is rationally responding to her changed circumstances and her need to plan for her financial future. Jim is coming to understand that the partnership as he knew it has given way to a new business model. Anyone can leave at any time—and take their business with them.
Jim began sending some of his work to senior associates, helping to lighten Megan’s workload. She in turn took his more critical meetings. He also mentored Megan to land a new client for the firm. Their teamwork, honed over years, is on a new footing, but the trust between them is reemerging.
As two-tiered partnerships become practically ubiquitous, it falls to effective leadership to set the course for how partners will interact. There will be inevitable conflicts because they occupy different spheres of responsibility. But smart leaders will help both contract and equity partners have their perspectives validated. This is a time to say the quiet part out loud.
Lauren Krasnow, JC, PCC, is an executive coach, speaker and consultant to law firm leaders. She is a chapter leader of the International Coaching Federation (ICF). In 2023 and 2024, Lawdragon named her a Global 100 Leader in Legal Strategy & Consulting.
Reprinted with permission from The American Lawyer. © 2025 ALM Media Properties, LLC.
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