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Weil Gotshal & Manges is to shorten the length of its partner track next year in a bid to stem the exits of talented senior associates.

The firm is cutting back its partner path by two years across all of its offices to seven-and-a-half years, bucking the trend of a lengthening journey to partnership. The firm is betting that the move will prompt more fourth- and fifth-year associates to stay at Weil, rather than jump to a competitor or an in-house career.

"The current generation of lawyers doesn't want to wait nine or nine-and-a-half years" for a promotion decision, said executive partner Barry Wolf.

At the same time, Wolf is quick to rebut what may be on the minds of sceptics who see this as an "up-or-out" system – which he insists it is not. "It's not designed to weed people out," he said.

The firm informed associates about the changes on Wednesday (30 May) morning.

Currently, Weil associates can be elevated to partner or counsel after nine-and-a-half years. And once a lawyer becomes counsel, he or she could remain there for an unlimited period of time.

Under the new system, associates will be promoted to partner or counsel after seven-and-a-half years. "We expect substantially all of our associates who are here at seven-and-a-half years will be promoted to one or the other," Wolf said. After a phase-in period of the new system, the firm will no longer have any eighth- or ninth-year associates, except under unique lateral situations.

While the firm hasn't yet set the new partners' compensation scale, Wolf said he expects it to be at least $100,000 more than what lawyers were making as an eighth-year associate. A typical eighth-year associate in a large New York firm, with year-end bonuses, makes $400,000 or $425,000, he noted.

As before, associates promoted to partnership will first join the firm's non-equity ranks, a group that doesn't share in the firm's profits. Weil refers to this group as fixed-income partners.

Others, after seven-and-a-half years, will be promoted to one of two categories of counsel. One will be a niche counsel category in which a lawyer can remain for the rest of his or her career, reserved for specialty practices, Wolf said.

Other non-niche counsel will have a three-year term, and will be eligible to become partner after one, two or three years. If the counsel attorney doesn't become partner at the end of the three-year period, Weil will transition them out of the firm, offering outplacement services, Wolf said.

Even in the counsel ranks, the lawyers will make more than what they would have made as an eighth- and ninth-year associate, Wolf said. Weil will offer counsel in their second and third years a "stay bonus" – the firm is considering $50,000 – to motivate them to remain.

"If they don't become partner, they will have a title and more money to then go out and look for a job," he said about those who don't stay on at Weil.

As part of the change, the firm will tell associates at the end of their fifth year about their prospects for advancement. While Wolf acknowledges that some associates may leave at this point, he said that if they are already at their fifth year at Weil, most of them will be encouraged to stay at the firm through their seventh year.

The new career track will be implemented firmwide at the end of 2019, effective for 1 Jan 2020, promotions. Next year, the firm will consider promoting associates who are in the seventh, eighth and ninth year.

After the initial ramp-up period, the firm expects to promote the same number of associates each year to partner as it does now, while counsel promotions will likely increase, Wolf said. (Last year, the firm promoted 10 lawyers to partner and nine to counsel.)

Heading off headhunters

Weil, like the rest of the industry, has lengthened its partner track during the past couple of  decades, climbing to nine-and-a-half years in 2010.

At the same time, law firms are struggling to fill in the ranks of midlevel and senior associates. While the associate attrition rate dropped slightly in 2016 to 16%, one industry report found that 81% of entry-level associates leave law firms within five years. The report pegs annual attrition costs for a 400-lawyer firm to be $25m, due to turnover, recruiting and replacement expenses.

Wolf said Weil's attrition rate is similar to others firms in New York. After four or five years, headhunters "prey upon the uncertainty" in an associate's future and the length of time to make partner, Wolf said, with associates often asked, "do you really want to spend the next five years doing this?" without a promise of success.

Wolf said Weil's new approach was heavily vetted within the firm, after the management committee formed a partner team in July 2017 to study how to improve associate retention and gathered input from associates. Firm partners unanimously approved the system on 24 May.

Even though the firm may be paying more lawyers a higher salary, "we don't expect this to be a cost because we expect to retain significantly more senior-level associates, which will clearly improve leverage, increase revenue [and] decrease the cost of hiring laterally", Wolf said.

At the same time, he said he hopes and expects the new approach will help retention and advancement for all associates, including diverse associates, while the firm will continue sponsoring, mentoring and other programmes.

Not 'up or out'?

Wolf said he doesn't see the fifth or seventh years as a new threshold for the firm to push some associates out sooner, and there is no change in the criterion and standards for associates to make partner. Just as before, the amount of time that new partners stay in the fixed-income ranks will vary by their performance, Wolf said.

"We believe this is in the long-term best interests of our law firm," he said, noting the firm is making the change from a position of strength after record revenue and profit growth last year.

He acknowledged there would likely be scepticism in some corners. "People may initially think that all of a sudden, we're going to the Chicago model," he said, not naming any particular firms but pointing to firms with "up-or-out" systems.

Firms known to employ up-or-out systems include Kirkland & Ellis and other Midwestern-founded firms, said David Barnard, a consultant to Am Law 100 firms as a founding partner of Blaqwell. In such systems, lawyers make non-equity partner after about seven years and then, if they prove their business-generating potential within three to five years, they are promoted to equity partners, he said. If they don't, they are out of the firm.

But countering concerns about Weil becoming an up-or-out system for partners, Wolf stressed that under the existing and the new system, "we expect everyone that we make partner will retire as a partner".

It's possible some lawyers may also worry about a shorter tenure as a result of the change. "Lawyers are trained to find problems with anything," Wolf said. "Will someone say" 'Oh my god, instead of having nine-and-a-half years of assured employment, we only have seven-and-a-half years'?

"That is something we have to drive home and make clear that's not what's intended here," Wolf said, adding that he anticipates most associates at the fifth year will be encouraged to stay, and most at the seventh year will be told they will have the partner or counsel title.

Blaqwell's Barnard is one of the sceptics. He questioned whether Weil couldn't already retain their most talented associates – "they would find a way to retain [a superstar associate]", he said – and he has doubts whether the approach will actually improve overall associate retention.

Still, he said, the new system is "great for those people who become partner after seven years", and it will help Weil continue to keep its superstar associates.