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Gibson, Dunn & Crutcher is looking to go off-track. The firm announced that it is creating a nonequity partner tier, removing it from the shrinking pool of national firms with a single partnership model. “We have under development some sort of nonequity partner track,” says Peter Ziegler, partner in charge of the Los Angeles offices. “The plans are in the process of being thought through.” The new designation would likely be available for lawyers joining the partnership going forward, either through a lateral hire or from the associate ranks, says Executive Director Charles Woodhouse. The level will be useful if the 800-lawyer firm wants to bring in a partner who offers strong expertise but not a book of business sufficient to warrant getting equity, he says. Associates would likely go through a review process when they are approaching partner level, now a track of about 8 1/2 years. It’s anticipated that some would go straight to equity partnership, Woodhouse says. The details will be ironed out over the next several months. “It’s a matter of providing for the possibility of having someone stay, rather than the up-or-out philosophy,” he explains. One Gibson partner contacted about the plans is taking a wait-and-see approach. “So far, not a lot of people are talking about it or worrying,” says this partner, who requested anonymity. “In recent years it’s been brought up a lot — everyone else seems to have it, so why don’t we? But now that we have it, we don’t know what it means.” The partner indicated that adding a nonequity tier might address the difficulty of recruiting nonequity partners from another firm. Returning such partners to associate status is unworkable. Recruiter Larry Watanabe agrees that the change will make Gibson, Dunn more enticing to lateral recruits. The single-tier structure has made entering the firm difficult, especially given Gibson, Dunn’s high profits per partner. Gibson, Dunn is one of the most profitable big firms in California. It generated profits per partner of $1.375 million in 2004, according to American Lawyer magazine’s Am Law 100 survey, despite a relatively low leverage of about two associates per partner.
Kellie Schmitt is a reporter for The Recorder , an ALM publication.

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