How Do Law Firm Partners Get Paid?

Many lawyers aspire to become a law firm partner at some point in their careers. These positions come with prestige, fantastic professional growth opportunities, and, of course, a significant pay raise. But how much do law firm partners get paid?

Law firm partner salaries are determined in part by the structure the firm uses. Below, we explore these structures and how law firm partners get paid in each.

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What Do Law Firm Partners Do?

Law firm partners play an important leadership role in their firms. They manage the day-to-day business of the firm, including marketing, hiring, billing, accounting, and more.

Partners also often serve as mentors to the younger or more inexperienced attorneys in the firm. They may guide them through cases or coach them on professional skills.

And on top of all this work, law firm partners have their own caseloads to manage. In fact, often, partners take on the most complex or challenging cases in the firm.

Because they take on all this extra responsibility, partners are usually paid differently than associates and other lawyers in a firm.

Equity vs. Non-Equity Partners

Before we dive into the different structures law firms use to pay their partners, we need to spend a little time talking about equity versus non-equity partners.

Equity Partners

As you might guess from the name, equity partners own a share of the firm. They may have been one of the founding partners and gotten their equity that way, or they may purchase an equity share when they become a partner.

Because equity partners own a piece of the firm, they tend to get paid through a profit-sharing model, even if the firm uses a different structure to pay the non-equity partners.

Non-Equity Partners

Unsurprisingly, non-equity partners don’t own a share of the firm, although they have still been promoted to partner. They may be paid through any of the traditional or non-traditional structures we’ll discuss below.

In some cases, non-equity partners may have the opportunity to become equity partners after a certain period of service in the firm. Instead of buying their share, they may earn it through their work.

Traditional Structures

Traditional law firm partnership structures compensate partners based on their experience and seniority, and they tend to encourage partners to bring in more clients and revenue to the firm.

As you might guess from the name, profit-sharing models share profit in a law firm among the partners. Of course, the shares may not be equal; partners with more experience or seniority may earn more than their colleagues.

This model can be a great way to invest partners in making the firm as successful as they can. All that work directly benefits them since they get a portion of every dollar the firm earns.

Of course, the downside of this model is that it may make non-partner employees (including other attorneys) feel undervalued. They may not take as much interest in the success or failure of the firm since it doesn’t impact their earnings.

Formula-Based Models

Formula-based models can be a little more indirect and complex than profit-sharing models.

These models base compensation on a variety of factors, potentially including the number of billable hours worked, a partner’s client list, their contributions to business development, and so on.

This model rewards performance, rather than just the number of years worked. The more a partner is doing, the more they benefit.

Of course, the downside of this model is that it encourages partners to work absolutely as much as they can. While this may sound like a good thing at first, in the long term, it can lead to burnout, negative office politics, and unnecessary mistakes.

Non-Traditional Models

Non-traditional models of law firm partnership seek to solve the problems that can arise in the traditional structures.

Traditional Lockstep

A traditional lockstep model doesn’t look at who does what work, but instead bases compensation only on years of service. The longer a partner has been at a firm, the more money they earn.

This model encourages lawyers to be loyal to a firm and to stay in one job, rather than company-hopping in search of promotions. It can also give partners a little leeway to take care of their mental health and avoid burnout.

That being said, just because a lawyer has been at a firm for decades doesn’t mean that they’re doing the best work in the business. In this model, sub-par partners may be more highly rewarded based only on their tenure, rather than on their skill or work ethic.

Eat What You Kill

In the eat-what-you-kill partnership model, each partner is compensated based directly on the revenue they bring to the firm. Unlike the formula-based models, this approach does not consider billable hours, seniority, or any other factors.

Naturally, this approach encourages lawyers to bring in as many profitable cases as possible and to give their clients an outstanding experience. It can also reward work ethic and skill, which can bring more talented attorneys to your firm.

Unfortunately, this can also promote competitiveness and opposition within your firm. An attorney may not be willing to help a colleague with a case if they know they won’t get any compensation for it.

Modified Lockstep

The modified lockstep model aims to combine the best of both the traditional lockstep and eat-what-you-kill models. In this structure, partners are compensated more the longer they stay with the firm. But there are also extra compensation opportunities that are based on the revenue each person brings to the firm.

This does encourage loyalty to the firm and help to mitigate some of that competition that can arise in the eat-what-you-kill model. Higher-achieving attorneys are rewarded for their work without going over the heads of the more established partners.

That being said, this two-factor model can be complicated to administer. You’ll need a strong accounting department if you plan to implement this strategy.

Average Partner Salary

How much a partner makes depends on a number of different factors. These can include

The size of the firm – Unsurprisingly, the larger your firm is, the larger partner salaries are likely to be.
The firm’s practice area – Certain practice areas, such as corporate law, intellectual property law, and patent law, pay higher than others (juvenile law, family law and immigration law, for instance).
Where the firm is based – Law firms based in areas with higher costs of living (California, Washington, etc.) will pay more than firms located in lower-cost areas, such as Alabama and Mississippi.
Which compensation model the firm uses – And you won’t be surprised to learn that how much partners get paid depends a lot on which compensation model your firm uses.
Equity vs. non-equity partner – As we’ve mentioned already, equity partners usually make more than non-equity partners. In some cases, they may make as much as double what their non-equity colleagues do.
The partner’s demographic – Unfortunately, a partner’s gender, race, and other demographic factors can impact their income. Men make more than women, and white partners make more than people of color in the same roles.

All that being said, there is a general salary range most law firm partners can expect to make. According to a 2022 survey, law firm partner salaries averaged $1.12 million. The median salary for this position was $675,000.

Choosing the Right Structure for Your Firm

Deciding which payment structure you want to use for your firm is a matter of considering your needs, your resources, and your priorities.

A large portion of your news may be based on the current size of your firm and your plans for growth. For instance, if you don’t have the resources to administer a modified lockstep model, you’ll need to choose a simpler structure.

You also need to think about what sort of culture you want to foster at your firm.

If you want to reward hard work and monetary success, eat-what-you-kill and formula-based models can make those qualities a priority for your partners. If you want to reward loyalty to the company and give your partners space to prioritize their mental health, profit-sharing models or either of the lockstep models can encourage those qualities.

And you need to think about what your firm needs from its partners in the long and short terms. Which model is going to help you achieve your firm goals, both over the next year and across the next decade?

Bring in More Profit for Everybody

Partner salaries can vary widely depending on a number of factors, not least of which is the compensation structure their firm uses. Traditional structures focus mostly on a partner’s seniority or the profit they bring to the firm. Non-traditional structures work to solve the challenges the traditional structures present for firm culture.

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