
17/02/2022
Showcase Magazine
Not All Partners Are Created Equal
All attorneys start their careers as associates, and many will go on to become of counsel, non-equity partners, or equity partners.
EQUITY VS NON-EQUITY PARTNERS
There are two main types of partnerships within a law firm, Equity and Non-Equity. The main difference between Equity and Non-Equity is that Equity Partners take the most risk and for doing so, get the most rewards. This typically creates a two-tier compensation system for partners.
Equity Partners, lead the firm into the future. They have full voting right which include but not limited to evaluating attorneys, firing, recruiting, and strategic direction of the firm.
Many law firms offer their attorneys Equity partnership and Non-Equity partnerships. An Equity Partner is an owner of a law firm. Looking from the outside, you may not be able to know who an Equity Partner or, who is not. Sometimes, law firms will differentiate by title (see below on firm titles and what they mean).
Non-Equity Partners do not have the same job security as Equity Partners.
Non-Equity Partners have more flexibility to where and how they want to work.
Most Non-Equity Partners receive a salary instead of partnership distributions.
Non-Equity maybe paid by W2 vs. Equity Partners are paid by a Scheduled K-1.
Both Equity and Non-Equity attorneys can receive a base salary or draw with bonus. Again, this depends on the firm.
This and more … Check out Nigeria Showcase Magazine published by Jozech Publications.
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