Non-equity partners are a permanent fixture at medium and large law firms throughout the United States. The existence of two- and multi-tiered partnerships serves numerous beneficial purposes for the law firms and the non-equity partner alike, but, despite their ubiquitous nature and their established existence, the legal status of non-equity partners is still somewhat uncertain. Recently it has been posited, despite much case law to the contrary, that non-equity partners are in fact “true” partners1 as opposed to employees. At the same time, a relatively recent ethics opinion has called into question the practice of holding non-equity partners out to the world as partners.2
This column briefly provides some insight into the background and trends concerning non-equity partners, analyzes these recent authorities, and suggests some basic advice on helping to make certain that non-equity partners are not inadvertently treated as equity partners for purposes of sharing of profits or losses but are able to be held out to the world as “partners.”
Recent Trends
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