You could call it the last black box. For more than three decades, The American Lawyer has ranked profits per partner at Am Law 200 firms. Parsing and comparing those equity partner paychecks has become routine sport among law firm leaders, consultants, and recruiters. Associate compensation is put under the same microscopesalaries and bonuses appear on news sites and blogs minutes after their announcement or distribution. But compensation for nonequity partners, the fastest-growing cohort in The Am Law 200, has remained largely opaque. Until now.
How much do nonequity partners get paid? For the first time we decided to apply some simple math to our most recent Am Law 200 financial survey data to find out. Our methodology was straightforward: Just as we derive a firm’s profits per partner from its net income (we divide that amount by the number of equity partners), we used each firm’s reported nonequity compensation, divided by its total number of nonequity partners, to calculate an average payout per nonequity partner, or PNEP. The range in PNEP results was startling, going from $1.53 million at the high end (Milbank, Tweed, Hadley & McCloy) to $100,000 at the bottom (Vorys, Sater, Seymour and Pease) [see "How the Other Half Lives,"]. What’s more, the relationship between what firms paid their nonequity partners (PNEP) and what they paid their equity partners (PPP) was all over the place, with PNEP spanning from less than a fifth of a firm’s PPP to a number that’s only a bit below it (at Wiley Rein, for example).
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