Non-Equity vs Equity Partner: Key Differences Explained

Dear Priya B.,

Understanding the Partnership Landscape

The distinction between non-equity and equity partnership represents one of the most significant structural changes in BigLaw over the past two decades. These aren't just different titles — they're fundamentally different business relationships with your firm.

Non-equity partners (sometimes called "income partners" or "salaried partners") receive fixed compensation that varies significantly by firm and market. You'll have the partner title and often client-facing responsibilities, but you're essentially a highly compensated employee. Equity partners, by contrast, own a piece of the firm and share in its profits, with compensation that can vary significantly based on firm performance and individual contribution.

The Compensation Reality Check

Key factors to consider when evaluating offers include: non-equity partnerships often provide more predictable income but with limited upside. Your compensation is typically based on a formula considering originations, billable hours, and firm contribution, but it's capped by the firm's predetermined range.

Equity partners face more volatility — your income fluctuates with firm performance — but the upside can be substantial. At major firms during periods of growth, successful equity partners often see their compensation grow accordingly. However, you're also exposed to downside risk during economic downturns.

If you're curious about compensation benchmarks, the Cravath scale calculator can help you understand associate-level baselines, though partner compensation varies significantly by firm and performance.

The Business Development Factor

Your book of business plays a crucial role in determining which track makes sense. Non-equity partnerships often require minimal portable business — varying origination requirements depending on the firm and practice area. Firms use these positions to retain talented lawyers who aren't major rainmakers but provide essential client service and mentorship.

Equity partnerships typically demand substantial business development. Firms typically expect substantial portable business for lateral equity partners, though requirements vary significantly by practice area and market conditions. The partner book calculator can help you assess whether your originations meet typical equity partner thresholds.

Market Dynamics at Play

Practice area demand significantly impacts partnership opportunities. In high-demand practice areas like privacy and data security, laterals may command premium compensation, and firms may fast-track promising candidates to equity tracks. AI and tech transactions groups are expanding at nearly every major firm, creating opportunities for both partnership tracks.

Geographic markets also matter. In rapidly growing markets like Charlotte, where lateral demand is outpacing supply and major firms are actively recruiting from DC, Atlanta, and NYC, you may have more negotiating leverage regarding partnership structure.

Governance and Long-term Considerations

Beyond compensation, consider your role in firm decision-making. Non-equity partners typically have limited voting rights and minimal influence over firm strategy, compensation decisions, or major business choices. You're consulted but not controlling.

Equity partners participate in firm governance, vote on major decisions, and have a say in partner admissions and compensation. This comes with additional responsibilities — you're expected to contribute to firm management, business development, and strategic planning.

The Path Forward

Many firms use non-equity partnership as a stepping stone to equity. If you're considering this route, candidates should negotiate clear metrics and timelines for advancement. Ask about the firm's track record — what percentage of non-equity partners eventually make equity, and what's the typical timeframe?

Some attorneys prefer the non-equity model long-term, especially those focused primarily on client work rather than business development. There's no shame in choosing stability over the entrepreneurial aspects of equity partnership.

Making Your Decision

Consider your career stage, risk tolerance, and professional goals. If you're 12 years in with a solid book, you're well-positioned for either track. The key questions: Do you want to be an owner or a high-level employee? Are you comfortable with income volatility in exchange for upside potential? Do you want meaningful input into firm direction?

Remember that partnership structures vary significantly between firms. Some "non-equity" positions at prestigious firms offer better compensation and prestige than equity partnerships at smaller firms. Focus on the total package — compensation, advancement opportunities, practice area strength, and cultural fit — rather than just the title.