For a global law firm, being competitive these days requires a lean, mean profit machine. And that means culling the herd to make way for younger, more active rainmakers. This fall, Chicago’s Sidley & Austin took a bold step in that direction, announcing that it will demote about 20 of its equity partners to counsel and senior counsel positions.
The decision to strip equity from 8 percent of the firm’s approximately 260 equity partners is part of a strategic plan that was announced at the annual partners meeting on October 13. The affected partners, who are mostly in their mid-fifties and early sixties, will lose their equity as of January 1, according to managing partner Charles Douglas. Older partners will be given the title of senior counsel; more junior partners will become counsel. They’ll receive a guaranteed income, and will get their capital contributions back. Douglas says that he can’t quantify how much their compensation would change; the firm has several compensation tiers, and most partners receive a mix of equity and guaranteed income. Last year Sidley’s equity partners made an average of $575,000, according to the Am Law 100 survey.
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