Responses to Law360’s survey on partner compensation revealed that 43% of the 584 attorneys included (all from firms with 25+ lawyers) had taken pay cuts directly resulting from COVID-19. With an average of 12 years at the partnership level, these respondents are describing circumstances that may lead to an unprecedented spike in lateral partner moves.
This time of year historically is peak season for lawyers to change firms. Once partners have received their draws from the previous year’s performance, they generally want to move on as quickly as possible to give themselves the time necessary to generate solid origination and billing numbers at their new firms and qualify for bonuses this year.
What could complicate the lateral partner process in 2021 is that lawyers looking to leave their firms may have lower compensation to report on lateral partner questionnaires (LPQs) and 34% of those surveyed said their firms had de-equitized partners. This data is self-reported and might not represent the most accurate percentages, but the numbers still signal that many attorneys will need to change how they pitch themselves.
A convincing business plan will play a more important role now in how firms evaluate candidates when past performance, especially in hard-hit practice areas, cannot be relied on as an indicator of future business. Meanwhile, some law firms may be willing to pay premiums for those attorneys who have continued to succeed despite struggles in the industry.