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Supporting Non-Equity Career Opportunities Through Two-Tier Ownership Structures

By Kristin K. Stark

Lately, we've been hearing from a growing number of our (Hildebrandt International, Inc.) clients about escalating concerns relating to career path and non-equity opportunities. Although 79 AmLaw 100 firms and 169 of the NLJ 250 firms acknowledge a tiered ownership structure, and a large number of others utilize a de facto two-tier structure, many firms still adhere to a single-tier model.

Still a large number of other firms have moved to a two-tier structure but continue to apply an 'up or out' policy, forcing all non-equity partners to ultimately meet the criteria required of equity partnership or to find a new law firm. Like single-tier firms, these firms limit long-term opportunities for strong lawyers who lack business development skills or equity partnership interests.

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