At the height of the financial crisis, the phenomenon of law firm partner de-equitization was also at its peak. This de-facto termination of older partners who may have had high billing rates but who brought in less business than their fellow partners was a purely financial strategy that had enormous human impact. Times of crisis led firms to take drastic action rather than hold on to partners who were once added for a reason.
We now appear to be past the peak of the de-equitization tsunami, but that doesn’t mean the phase-out of older partners has gone away at larger firms. The Wall Street Journal reported a variety of anecdotal examples early in 2013 to illustrate that de-equitization is not dead: a one-third partner reduction at a 200-lawyer Nashville firm, a Wells Fargo Private Bank survey saying that 15 percent of respondent firms will cut partners in the first quarter, a consultant’s claim that many big firm partners are billing 30 percent below the traditional standard of 1,900 hours a year.
