The ranks of newly-minted, New York-based partners working at the state’s largest law firms grew nearly 30 percent in the last year, continuing a trend of rising partner promotions in recent years.
The New York Law Journal surveys and tracks partner promotion classes, both firmwide and in New York, of the 25 firms employing the most lawyers in the state, as ranked by the NYLJ 100.
In the last year, the top 25 firms promoted 147 New York lawyers to partner, about a 27 percent increase from their previous round of promotions. Firmwide, this same group of firms promoted 411 lawyers to partner, up 22 percent from the previous year.
The increase in new partners in the last year may be a natural fluctuation after a drop in promotions last year. But other factors are at play this year, including some firms with possibly a record high number of promotions, and a healthier partner pipeline at New York firms in the post-recession period.
A look back from 2012 to 2018 shows a slow and steady rise in Manhattan promotions amid the 20 largest law firms in New York. (The group of five firms that make up the last fifth of the top 25 changes every year based on shifts in relative head count.)
The Law Journal in 2012 found the top 20 firms promoted about 70 New York lawyers to partner; in 2014, the same firms promoted about 83 to partner; and in 2016, they promoted about 102.
Two years later, these same firms promoted about 125 New York lawyers to partner—the largest recorded number in at least the last six years, if not longer.
Several firms had their largest promotion class in New York in recent years. They include Kirkland & Ellis, promoting 24 New York lawyers to partner in the last year; Milbank, Tweed, Hadley & McCloy, promoting six to partner in New York; and Shearman & Sterling, promoting seven to partner in New York.
The steady rise in New York promotions coincides with a period of revenue and profit growth for many Wall Street firms in the last two years.
According to surveys by Citi Private Bank’s Law Firm Group, equity partner head count for the legal industry was down 0.3 percent in 2017 from 2016. New York-headquartered firms, in contrast, saw a 0.5 percent increase.
Gretta Rusanow, head of advisory services at the bank’s law firm group, points to “wide dispersion” behind Citi’s figures, noting that some profitable New York-headquartered firms saw equity partner growth rates above 1 to 2 percent last year.
Still, Rusanow said she continues to see a “long-standing trend of careful management” of equity partner head count. The 2017 equity partner head count changes are consistent with the slight to moderate fluctuations she has seen in recent years, she said.
And while some firms may be promoting more lawyers to partners in recent years, if equity ranks are staying steady, firms must have a steady of flow of exits, including through retirements, lateral moves or counseling out unproductive partners.
“We know that firms have continued to promote from within, but we also see the equity partner head count number is essentially flat,” Rusanow said. “It does beg the question, have those firms seen an increase in their departures or retirement from equity partnership?”
Of course, some firms’ new partners are in the non-equity ranks. Among the 25 law firms surveyed here, about half have non-equity and equity tiers, according to National Law Journal data.
At White & Case, each of the firm’s last two rounds of partner promotions in New York—nine in 2017 and 10 in 2016—have been more than double the number in the previous four years, when the firm was promoting three or four lawyers to partner in Manhattan.
David Koschik, member of White & Case’s executive committee, said the large promotions classes don’t indicate a corresponding number of exits. “There’s always a certain number of departures and retirements, of course, but we have grown and continue to grow the overall partner head count not just in New York, but across the U.S. and globe,” he said.
“As part of our 2020 strategy, we targeted growth in the U.S., specifically in New York, as a key goal. We’re doing that two ways, both by lateral partner additions as well as through organic growth, promoting from within,” Koschik said. “We’ve had a very strong pipeline of candidates for partnership over the past few years and think that will continue.”
While most of the top 25 firms saw an increase in New York partner promotions, nine saw declines. Mainly those declines were slight, but some saw steeper drops in New York: Sidley Austin and Cleary Gottlieb Steen & Hamilton each promoted only two New York lawyers to partner—one of the lowest number of New York promotions in the last six years for both firms.
Meanwhile, firms continue to make little if any progress on promoting more women to partner. Among all firmwide promotions at the top 25 law firms, about 32 percent of all new partners of the 25 largest firms were women. That’s higher than last year’s proportion, but about the same as two years ago.
Two of the 25 surveyed firms promoted no women to partner in their most recent round of promotions: Weil Gotshal & Manges, which promoted 10 men, and Schulte Roth & Zabel, which promoted two men. Meanwhile, in the last year, Paul, Weiss, Rifkind, Wharton & Garrison; Skadden, Arps, Slate, Meagher & Flom; Sullivan & Cromwell; Fried, Frank, Harris, Shriver & Jacobson; and Cahill Gordon & Reindel promoted only one woman to partner.