At a time when large New York firms are flush with profits, their new partner classes have significantly expanded.
According to a New York Law Journal analysis, the 25 law firms with the biggest presence in the state significantly increased their partner promotions firmwide for a second year in a row and grew the percentage of newly promoted partners who are women to a new high of 34 percent.
The New York Law Journal surveys and tracks new partner classes of the 25 firms employing the most lawyers in the state, as ranked by the NYLJ 100.
The 25 firms, which collectively have more than 10,800 lawyers in New York, grew the number of newly minted partners based in the Empire State from 147 last year to 158 over the past 12 months, an increase of about 7 percent, according to the NYLJ's numbers.
Internal promotions to partner in all the firms’ offices rose more sharply, from 423 last year to 487 this year, up more than 15 percent.
The NYLJ’s figures reflect partner promotions from associates and counsel into equity and nonequity partner ranks, as several of the top 25 firms have multitier partnerships.
According to the NYLJ's analysis, the number of new women partners firmwide also increased, from about 32 percent—a number that was basically flat over the previous two years—to just shy of 34.5 percent. That number is still short of the 46 percent of associates who are women, but higher than the overall portion of all law firm partners who are women, about 23 percent, according to industry data from the National Association for Legal Placement.
Fifteen of the biggest 25 firms in the Empire State elevated more partners firmwide over the last year than the year before, and 13 promoted more in New York, although local numbers have tended to be smaller and more variable from year to year. For 20 of the firms, the promotion numbers both locally and globally moved in the same direction—either both grew, as was the case for 13 of them, or both shrank, as was the case for seven.
The expanding new partner classes come at a high time for firms, as 2018 was considered to be the strongest year for the legal industry's profit growth in the post-recession period.
Gretta Rusanow of Citi Private Bank’s Law Firm Group noted the year was especially good for those based in the Big Apple.
Both in 2018 and the year before, she said, while law firms generally have slightly reduced their tally of equity partners, the equity partnership actually grew for the New York-based firms that Citi tracks—0.5 percent growth in 2017 and 0.8 percent growth in 2018.
“You’re just talking about firms who are in the right market, who are enjoying growth,” she said.
Leading the pack in promotions was Kirkland & Ellis, well known for having a large pool of nonequity partners. The firm promoted 26 New Yorkers to partner last year, among 122 firmwide. The firm's new partners were concentrated in mergers and acquisitions, private equity and litigation.
Several other firms promoted eight to 10 attorneys to their partnerships in New York, including Paul, Weiss, Rifkind, Wharton & Garrison; Latham & Watkins; White & Case; Willkie Farr & Gallagher; Fried, Frank, Harris, Shriver & Jacobsen; and Arnold & Porter Kaye Scholer. There was no clear trend in terms of promotions between corporate practices and disputes practices.
Greenberg Traurig, which elevated 33 lawyers firmwide including five in New York, stood out for its promotion of 10 lawyers in its real estate practice. Brian Duffy, the firm’s CEO, said that number reflects the size and breadth of the practice—it encompasses more than 400 lawyers, he said—but said each new partner (or shareholder, in Greenberg's parlance) was promoted on the merits.
“We don't come into it each year with any preordained or preset number of shareholders that we intend to make,” he said. “We don't say we're going to do ‘at least X’ or ‘more than Y.’”
Still, that doesn’t mean overall law firm goals are put out of mind. Mike Schmidtberger, who chairs Sidley Austin’s executive committee, said in a statement that the firm looks to rising associates and counsel who do “exceptional work” and show a commitment to client service. But their contribution to the overall business also matters, he said, noting that making a partner is a long-term decision.
“Our decision to promote an associate or counsel to partner is based as much on the needs of the firm as it is on ensuring we continue to provide value-added service to our clients,” he said.
David Koschik of White & Case, which promoted 41 lawyers worldwide, including 10 in New York, said the numbers reflected the firm’s focus on growing its New York office and its U.S. presence more broadly. The firm is seeking to hit head count targets of 500 in New York and 1,000 across the country in 2020, Koschik said, adding “the progression and the trajectory are both very positive.”
Koschik said his firm has made the partner promotion process more transparent, letting senior associates know that they are being considered and inviting them to make the “business case” for being elevated. He also said “upward feedback,” as evaluations by junior associates about the senior associates are known, has become more important in the decision to mint partners.
A Gradual Incline
The percentage of women in new partner classes has been steadily rising at a rate of about one percent per year nationwide, according to NALP data. The same could be true in New York, depending on whether the 34 percent figure calculated by the Law Journal for 2018-2019 is a blip or a new trend. About five years ago, in early 2014, the Law Journal reported that women made up about 29 percent of new partners firmwide among the top quarter of NYLJ 100 firms.
The diversity of large firms' new partner classes has gained even more importance in light of fresh scrutiny on partner promotions in recent months. In December, Paul, Weiss drew criticism for a having a new partner class dominated by white men, prompting more than 170 general counsel in January to urge law firms to do better or else lose their business. (Brad Karp, the firm’s chairman, said at the time that an “idiosyncratic demographic pool” was to blame, and future classes of new partners would be more diverse.)
All but one of the 25 firms evaluated for this report promoted at least one woman to partner over the past year, including eight of the nine that had a single-digit number of promotions across the entire firm. Kramer Levin Naftalis & Frankel, which promoted three to partner, including two in New York, is the only one that didn’t.
Kramer Levin said in a statement that three of the five partners it promoted the year before were women and most of those promoted to the position of special counsel last year were women. The firm said it expected most of those promoted to partner later in 2019 would also be women.
"A single year should not be viewed as an indicator," it said.
At three firms, more than half of the newly announced partners were women: Cravath Swaine & Moore, in which all three new partners were women; Debevoise & Plimpton, where three of the five new partners were women; and Arnold & Porter Kaye Scholer, whose new partnership class of 16 included 10 women.
About 46 percent of White & Case’s new partner class were women, but Koschik said diversity plays no formal role in the decision. He said the firm works to make sure junior lawyers of all backgrounds are given opportunities to show their mettle, but ultimately, their performance is the key factor in the decision to add them to the firm’s two-tier partnership.
“Our practices here in the U.S. have been doing well and have been generating very strong partner candidates for us to consider,” he said.