Promotion to partner

[Rashabon]

I’d rather be an income partner than a 10th year Associate. I’ve made this point to people but outside of lawyers who go and look up someone’s year of call, an associate is always junior and a partner is always senior. No one can tell if you’re a 4th year associate or 10th year associate from your emails or when talking to you. That impacts your perception when giving advice, acting on a file or trying to bring in business. Conversely, clients can’t distinguish between a first year income partner and a 5th year equity partner.

Income partnership benefits firms by extending out the pathway to equity, keeping compensation down, and raising the profile of star associates. It benefits the income partners by giving them a title they can leverage for their careers, increased compensation over being an associate, access to partnership information, etc.

There are also tax implications to being an income partner as opposed to an associate.

[JurisPrudent]

2 hours ago, Rashabon said:

I’d rather be an income partner than a 10th year Associate. I’ve made this point to people but outside of lawyers who go and look up someone’s year of call, an associate is always junior and a partner is always senior. No one can tell if you’re a 4th year associate or 10th year associate from your emails or when talking to you. That impacts your perception when giving advice, acting on a file or trying to bring in business. Conversely, clients can’t distinguish between a first year income partner and a 5th year equity partner.

Income partnership benefits firms by extending out the pathway to equity, keeping compensation down, and raising the profile of star associates. It benefits the income partners by giving them a title they can leverage for their careers, increased compensation over being an associate, access to partnership information, etc.

There are also tax implications to being an income partner as opposed to an associate.

Just to play devil’s advocate here, I certainly agree that most clients will not “look behind” a lawyer’s title to determine their year of call, however, having a 5/6 year call as a “partner” on a file, does have certain potential pitfalls:

1.      You’ve said that “clients can’t distinguish between a first year income partner and a 5th year equity partner” and, in most cases, that’s probably true. But that also means that, as a firm, if you are going to make someone an income partner, you need to be comfortable that that person’s training or the systems set up within the firm are sufficient so as to ensure that the advice being given by that lawyer is advice you are comfortable that a “partner” is providing. I.e., the client is going to assume that the person giving them advice is a relatively senior lawyer – so the firm just needs to be sure that its income partners have the support systems available to them that are necessary to make up for the fact that these lawyers won’t have the same level of experience as other “partners” across the street (not that experience always equates to better advice – but it does at least give a firm more of a track record by which to judge a lawyer).

2.      Along the same lines from a client’s perspective, having a deal team member with a “partner” title as opposed to an “associate” title will mean that there will be an additional “partner” on each file and the reason why that’s necessary will need to be explained to the client. E.g., a transaction that would otherwise be staffed with an equity partner, a senior associate, a junior associate and a student will instead be staffed with an equity partner, an income partner, a junior associate and a student. This means that the firm will need to explain to a client why there are two “partners” as part of the core deal team (including the costs associated therewith – especially if the firm is billing out the income partner at a higher rate than senior associates of the same year of call).

No definitive right answer here – just different considerations to take into account for each model.

[Dinsdale]

Agree with the comments in various posts above.  Income partnership is mostly for optics facing outward (i.e. to clients), as well as a reassurance to the individual lawyer that they are "on track".  It might also come with a nice bump in total comp., depending on the firm.  Income partners do not hold units nor do they have votes (again, I can only speak for firms with which I am familiar).  There is probably some enhanced receipt of information though.  At the end of the day, each firm can structure at least some of these things in whatever way they choose.  The Partnerships Act is a fairly permissive statute.

Edited January 12 by Dinsdale

[WhoKnows]

52 minutes ago, Dinsdale said:

It might also come with a nice bump in total comp., depending on the firm. 

It's also dependent on location. I know that in certain cities, the big comp bump comes when you go from associate to income, vs. others where it's a much smaller increase. 

[Alwaysblue]

Hmm interesting! What do you think is one of the essential and necessary qualities to being promoted to partner? Is it technical skills? Business development? Good personality? Are soft skills more important than hard skills?
 

 

[Rashabon]

A mix of all of the above.

[CleanHands]

1 hour ago, Alwaysblue said:

What do you think is one of the essential and necessary qualities to being promoted to partner? Is it technical skills? Business development? Good personality? Are soft skills more important than hard skills?

They're all perverts, mate. All in with each other. It's not who you know, it's who you blow.

[Aschenbach]

11 minutes ago, CleanHands said:

They're all perverts, mate. All in with each other. It's not who you know, it's who you blow.

 

[HipHopLawyer]

Any insight on what the typical buy-in amount for a big firm in the larger centres like Toronto/Calgary/Vancouver look like?

Hoping to unmask the secretive nature of partnership a little.  

[Diplock]

34 minutes ago, HipHopLawyer said:

Any insight on what the typical buy-in amount for a big firm in the larger centres like Toronto/Calgary/Vancouver look like?

Hoping to unmask the secretive nature of partnership a little.  

Very pleased to meet you anonymous guy on the Internet who just showed up! Since you ask, I'll tell you the secret that no one else knows. Prior to buying in, everyone is actually required to convert their investment into a little-known cryptocurrency, which is then held in the Cayman Islands. Its actual value fluctuates and is determined by a complex formula. This link explains it all:

https://www.youtube.com/watch?v=3GE0AiC-mi8

 

[HipHopLawyer]

54 minutes ago, Diplock said:

Very pleased to meet you anonymous guy on the Internet who just showed up! Since you ask, I'll tell you the secret that no one else knows. Prior to buying in, everyone is actually required to convert their investment into a little-known cryptocurrency, which is then held in the Cayman Islands. Its actual value fluctuates and is determined by a complex formula. This link explains it all:

https://www.youtube.com/watch?v=3GE0AiC-mi8

Ha! Very pleased to meet you too, internet prick!

While I appreciate that you didn’t give me the traditional Rick Roll and instead added a twist, I’d appreciate it even more if you could provide a substantive response to my question 😉 

[Rashabon]

No one that has any direct knowledge is going to answer your question.

[Big Pecker]

2 hours ago, HipHopLawyer said:

Any insight on what the typical buy-in amount for a big firm in the larger centres like Toronto/Calgary/Vancouver look like?

Hoping to unmask the secretive nature of partnership a little.  

It's not so much about the buy-in amount. See the link for a detailed breakdown of the process: 

 

 

[Diplock]

1 hour ago, HipHopLawyer said:

Ha! Very pleased to meet you too, internet prick!

While I appreciate that you didn’t give me the traditional Rick Roll and instead added a twist, I’d appreciate it even more if you could provide a substantive response to my question 😉 

Hey, I sent you to one of the most awesome things on the Internet.

[Cool_name]

5 hours ago, Rashabon said:

No one that has any direct knowledge is going to answer your question.

Why? 
 

I agree that they probably won’t, I just don’t really get the motivation for holding it close to your chest. Surely amongst senior lawyers it isn’t that much of a secret, especially the ones who bounce around. 
 

They have already bought in, letting others know what they paid would probably just help establish a price floor for future buy ins.

[JackoMcSnacko]

1 hour ago, Cool_name said:

Why? 
 

I agree that they probably won’t, I just don’t really get the motivation for holding it close to your chest. Surely amongst senior lawyers it isn’t that much of a secret, especially the ones who bounce around. 
 

They have already bought in, letting others know what they paid would probably just help establish a price floor for future buy ins.

NDAs, individualized packages, don't want a single possibly identifiable datapoint to be recirculated and taken out of context to shit for no upside - just some reasons I can think of why. 

[Bob Jones]

8 hours ago, Big Pecker said:

It's not so much about the buy-in amount. See the link for a detailed breakdown of the process: 

 

 

Only thing is, there's a 6G min/week. Welcome to the NFL kid.

[HipHopLawyer]

On 2/5/2024 at 4:11 PM, Cool_name said:

Why? 
 

I agree that they probably won’t, I just don’t really get the motivation for holding it close to your chest. Surely amongst senior lawyers it isn’t that much of a secret, especially the ones who bounce around. 
 

They have already bought in, letting others know what they paid would probably just help establish a price floor for future buy ins.

Very fair. Although I am surprised that we don’t even have ballpark figures out there. 

[Cool_name]

1 hour ago, HipHopLawyer said:

Very fair. Although I am surprised that we don’t even have ballpark figures out there. 

Agreed. I do not agree with the idea that NDAs are really what’s keeping people from sharing even ball park figures. I suspect it’s more a case of the people on here just not knowing. 
 

A ball park figure such as a buy in is based on a 1-2x revenue multiple isn’t distinguishable enough to be cause for concern.

[BlockedQuebecois]

8 minutes ago, Cool_name said:

I do not agree with the idea that NDAs are really what’s keeping people from sharing even ball park figures. I suspect it’s more a case of the people on here just not knowing. 

Several people on the forum, including folks who have commented on this thread, know the (approximate, in the case of competitor firms) buy-in figures for major Toronto firms. It's not a matter of not commenting because of an NDA, but because divulging sensitive confidential information about your firm on a public forum is idiotic. 

[Dinsdale]

It is financed, so the amount doesn't really come directly out of your pocket in any event.  That is all I will say.

On 1/22/2024 at 6:41 PM, Alwaysblue said:

Hmm interesting! What do you think is one of the essential and necessary qualities to being promoted to partner? Is it technical skills? Business development? Good personality? Are soft skills more important than hard skills?
 

 

Business development.  The others you mentioned are assumed (or you wouldn't have made it to senior associate/income partner level in the first place).

[switchdog]

If a firm has lockstep salaries for associates, does his/her salary typically still follow the lockstep if he/she is promoted to income partner? For e.g., if a 5th year becomes income partner, are they paid the same as other 5th year associates, or do they leapfrog the associate pay grid entirely (which would result in them receiving a salary higher than associates with the same/more years of experience)? I assume the latter, but it seems like a crazy pay bump if associates typically become income partner at the start of their 8th year.    

[Cool_name]

2 hours ago, BlockedQuebecois said:

Several people on the forum, including folks who have commented on this thread, know the (approximate, in the case of competitor firms) buy-in figures for major Toronto firms. It's not a matter of not commenting because of an NDA, but because divulging sensitive confidential information about your firm on a public forum is idiotic. 

If they know approximately the buy in of competitor firms, then sharing that amount wouldn’t be divulging sensitive confidential information about their firm. If they know the general amount for their firm and others they could provide a ball park which could easily be sufficiently vague. 
 

Also the post I was responding to directly raised the idea of a NDA. 
 

 

[BlockedQuebecois]

20 minutes ago, Cool_name said:

If they know approximately the buy in of competitor firms, then sharing that amount wouldn’t be divulging sensitive confidential information about their firm.

No, it would be divulging sensitive confidential information about somebody else's firm, in circumstances where that information was in all likelihood shared in confidence. 

Most long-term forum users are readily identifiable. We're not going to show ourselves to be incapable of keeping confidential information confidential in order to appease questions from people who have only a passing curiosity in the answer. Particularly because this is a situation in which everybody who needs to know the answer (i.e., people up for partnership at the firm) already knows the answer. 

Edited February 7 by BlockedQuebecois

[Cool_name]

14 minutes ago, BlockedQuebecois said:

No, it would be divulging sensitive confidential information about somebody else's firm, in circumstances where that information was in all likelihood shared in confidence. 

Most long-term forum users are readily identifiable. We're not going to show ourselves to be incapable of keeping confidential information confidential in order to appease questions from people who have only a passing curiosity in the answer. Particularly because this is a situation in which everybody who needs to know the answer (i.e., people up for partnership at the firm) already knows the answer. 

Okay, but “If they know the general amount for their firm and others they could provide a ball park which could easily be sufficiently vague.”

Not sure why you selectively excluded that part from your block quote.

If the concern is confidentiality, it could resolved by being vague. 
 

If the motivation is not sharing information because they get nothing out of it, then what are they doing on a form entirely devoted to offer advice for absolutely nothing in return?