Just before a global pandemic forced scores of large and small firms alike to cut expenses, the biggest law firms in New York continued to grow their classes of newly-minted partners in the last year.

Now legal market observers say the growing promotions at New York's biggest firms—a trend that the New York Law Journal has observed now for the past couple of years—may halt or reverse amid the economic turmoil from the coronavirus pandemic, as law firms look to preserve profit from any remaining business.

The Law Journal tracks partner promotion classes, both firmwide and in New York, of the 25 firms employing the most lawyers in the state, as ranked by the NYLJ 100. The firms range from Paul Weiss Rifkind Wharton & Garrison, with 833 lawyers in New York, to Kramer Levin Naftalis & Frankel, with 279 in the state. The partner promotion figures reported here were collected from press releases as of March 2020.

In the last year, the 25 largest firms promoted more people to partner in the last 12 months compared with the prior year. Collectively, the number of new partners increased by 9.6% firmwide to 536, while new partners in New York increased by 7% to 169 in all, according to a New York Law Journal review of promotion data. A growing share of the new partners were women.

The data includes promotions of all associates and counsel to partner, including both equity and nonequity positions. Some firms in the Law Journal's sample only have equity partners, but more of them have a two-tier partnership.

Many of the promotions in the NYLJ's sample were announced around Jan. 1, when many firms were anticipating a strong 2020 and the coronavirus pandemic was a speck on the horizon. Some firms that promoted new partners after the pandemic started have described the moves as long-term investments. But the sizes of other new partner classes are in doubt. 

"In the next round, if things aren't up and running at full capacity, I think firms will be pretty cautious about promotions," said Lisa Smith, a principal of the law firm consulting company Fairfax Associates. "Some [firms] are doing okay, others are telling me revenue is already off, in the last month, 20% or 30%, and in that environment, you just can't maintain the same pool of partners."

Kirkland & Ellis' new partner class, announced last October, had 141 lawyers—the most among the 25 top firms in the Law Journal's analysis. The firm is well known for its large, profitable and high-turnover nonequity tier. Even though it's just the fifth-largest firm in New York in terms of lawyer head count, its 28 in-state promotions amounted to nearly one-sixth of the Law Journal's sample of New York partner promotions.

Firms with other large new partner classes in New York include Latham & Watkins, a global juggernaut that tallied 10 such promotions in its Manhattan office, and Willkie Farr & Gallagher, which had 17. Willkie introduced a nonequity tier in 2018, and the firm's chairmen said in a 2020 interview that they view it as a "stepping stone" to equity for rising associates and some lateral partners.

But the three biggest firms in the state recorded just a single-digit number of partner promotions among lawyers assigned to their New York offices, including Paul Weiss, with seven announced in December 2019; Davis Polk & Wardwell, with seven announced in June 2019; and Skadden, with five announced in April 2019. All three only have equity partners, however, and firms have been much less keen to grow the equity partnership compared to the nonequity ranks.

Indeed, even though large firms have been steadily growing their new partner classes, the total number of equity partners isn't rapidly expanding

Gretta Rusanow, the head of advisory services of the Citi Private Bank's Law Firm Group, said the number of equity partners in Citi's sample of New York City-based firms has been relatively flat over the years. In Citi's sample, the equity ranks rose 0.8% in 2018 and fell 1% in 2019, she said.

Those figures reflect the creation of new equity partners as well as retirements and departures at the firms in the Citi sample. Rusanow noted that the numbers varied widely from firm to firm. "There is a wide dispersion in the equity partner head count movement," she said, noting among the most profitable firms, she did see some growth in equity partner head count last year.

Gender Shifts

The share of new law firm partners in the Law Journal sample who are women continued to grow. 202 out of 536, or about 37.7%, are women. In the prior year, about 34.5% of promoted partners were women.

The growing proportion of female new partners aligns with other data. The Diversity and Flexibility Alliance, for instance, found 41.3% of law firm partners made in 2019 were women, up about two percentage points from the year before. The growth follows scrutiny on partner promotions in the last two years from corporate clients.

Still, the share of all law firm partners who are women last year barely budged, rising from 23.4% to 24.2%, according to a December 2019 report from the National Association for Law Placement. The new partner statistic is below the share of associates who are women, which is 46.8%, according to NALP data.

Manar Morales, the president and CEO of the Diversity and Flexibility Alliance, which counts several law firms as its members, said the number of female new partners may be rising because firms are paying attention to places where unconscious bias can seep into decisions, including work allocation, origination credit and leadership roles. Some firms have also rolled out more flexible-working policies, though she noted that such policies—like eliminating the distinction between primary and secondary caregivers in leave policies—couldn't be viewed as only "women's issues."

"Flexibility is not a women's issue. You have to degender and destigmatize [it]," she said. "As you get more men into care, you get more women into leadership."

Six law firms promoted partner classes over the past year (as of March 2020), that were at least half women: Davis Polk, where women made up half of its 10 new partner class firmwide; Sullivan & Cromwell, with two-thirds of its six new partners women; Weil Gotshal & Manges, with nine women of 16 partners; Ropes & Gray, with the same numbers as Weil; Barclay Damon, where five of seven new partners were women; and Kramer Levin, where three of the four new partners promoted last year were women.

All but one of the 25 firms in the Law Journal's sample promoted at least one woman to partner. Schulte Roth & Zabel, a firm known for its hedge funds practice, was the only firm that made no new women partners in the last year. The firm, which promoted two men to partner, said in a statement that it has promoted and recruited talented women partners in other recent years, including bank regulatory partner Kara Kuchar in 2019.

"[Schulte Roth] is currently led by women in all areas of the firm," including two on its executive committee and some practice group leaders, the firm said. "We will continue to strategically recruit lateral talent and promote within the firm."

Clarification: This story has been updated to eliminate confusion around Skadden's partner promotions.