The trend that would have previously been billed as ridiculous is now happening more often in the world of BigLaw.
There has been “pervasive” demotion of equity partners in the top hundred law firms in the United States lately, a consultant reveals.
In a report by The Wall Street Journal, legal consultant Peter Zeughauser said that the practice, once considered outrageous in the world of BigLaw, has become prevalent.
He has seen BigLaw firms cull their equity partnerships within the past year and a half, the Journal said.
According to Zeughauser, of legal industry strategy and management consulting firm Zeughauser Group, said that there was weaker demand in the second and third quarters of the year, tempering optimism from the strong start of the year.
“There are a lot of firms that have seriously underperforming partners,” the consultant said.
Underperforming partners are those who typically bill in the range of 1,100 hours a year as compared to normal which is upward of 1,650 hours, the publication noted.
Underperforming partners can also be partners who do no bring in as much business as their peers in the law firm.
Recently, BigLaw firm Shearman & Sterling confirmed that it will trim its equity partnership.
The development comes as pressure to post more profit and keep costs down to please clients mount.
According to the Journal, law firms began demoting or cutting partners even before the recession but the trend continued since demand has not returned to previous levels after the crisis.
