For many ambitious associates and counsel level lawyers, the idea of making partner has always carried a certain mystique. Historically, that meant equity: ownership, profit share, voting rights, and a seat at the table. But the model has changed.
Over the last decade, the two-tier partnership structure has gone from exception to norm. Top firms like Cleary Gottlieb and WilmerHale have recently introduced non-equity tiers, and surveys show that most large firms now operate with both equity and non-equity tracks.
If you’re an associate with your eye on the next rung, or counsel considering a promotion, you’re increasingly likely to encounter a non-equity offer first. The question is: is it a stepping stone, or a ceiling?
Why Non-Equity Partnership Is Everywhere
Firms have embraced non-equity for both lateral hires and internal promotions. Even strong candidates with equity status at their current firms are often offered non-equity when moving. Why? Because firms are cautious about extending equity until performance and cultural fit are proven internally.
Why firms make non-equity offers:
• Trial period for laterals – Bring in high-potential partners without diluting equity.
• Internal optics – Avoid friction with homegrown talent working toward equity.
• Compensation flexibility – Incentive bonuses and guaranteed packages are easier to structure outside equity.
• Predictability for laterals – A fixed salary is often more appealing than profit-based variability.
• No buy-in required – Associates or counsel don’t face the 18-40% equity buy-in burden on day one.
• Mutual evaluation – Both sides can test the fit before making the bigger commitment.
Put simply, non-equity is no longer a consolation prize. In many cases, it’s the default first step into partnership.
What Is a Non-Equity Partner?
A non-equity partner typically:
• Holds the partner title – important for client-facing credibility.
• Earns a fixed salary + bonus, not a profit share.
• May have limited governance rights compared to equity partners.
• Is still expected to originate business, bill significantly, and lead teams.
Some firms see non-equity as a stepping stone to equity, while others treat it as a permanent track. The key is figuring out which applies where you are.
The Upsides
• Prestige & branding – The partner title carries weight with clients and competitors.
• Guaranteed income – Stability versus the ups and downs of profit shares.
• No capital contribution – Avoid the heavy buy-in required of equity.
• Compensation flexibility – Bonuses and guarantees can sweeten the package.
• Career flexibility – For some, non-equity provides long-term balance without the risks of equity.
The Downsides
• Compensation ceiling – Long-term earnings usually trail far behind equity partners.
• Governance limits – Non-equity often means reduced or no voting rights.
• Perception risk – A two-class system can leave non-equity feeling second tier.
• Dead-end danger – Some firms promote into non-equity but rarely advance to equity.
Due Diligence: What to Ask Before Saying Yes
1. Understand the firm’s structure
• What’s the equity vs. non-equity mix?
• Do non-equity partners have voting rights?
• Are there permanent income partners?
• Are non-equity treated as employees with benefits, or as true partners?
• What’s the capital contribution required for equity?
• How are women and minorities represented across equity and non-equity ranks?
2. How compensation really works
• How is non-equity pay set? Which metrics matter most (billables, originations, cross-selling)?
• Are bonuses available, and how are they calculated?
• Is there a cap on non-equity compensation?
• Do non-equity partners receive firm performance bonuses?
• How is origination credit shared?
• How quickly is pay adjusted in good and bad years?
3. The path to equity
• Is there a standard timeline before equity consideration?
• Is a minimum book of business required?
• Are profitability metrics applied to your practice?
• Is there an ‘up-or-out’ policy for long-term non-equity partners?
• Beyond meeting objective metrics, what cultural or subjective hurdles exist?
Negotiating the Offer
If you’re offered non-equity, don’t assume the terms are fixed. Here are levers worth negotiating:
• Equity roadmap – Push for a written timeline with measurable criteria.
• Compensation transparency – Ask for clarity on bonus formulas, origination credit, and comparators.
• Governance carve-outs – Secure observer rights or partial voting access.
• Exit protections – Nail down severance and non-compete terms.
• Review windows – Request 6-12-month reviews to avoid stagnation.
Is Non-Equity the Right Step for You?
• Yes, if: the platform is strong, compensation is clear, and the equity pathway is realistic.
• Maybe, if: the title and pay are attractive, but the pathway is vague, in which case, negotiate hard.
• No, if: it’s a permanent plateau with poor culture, limited upside, or no governance role.
Being offered non-equity partnership is both a recognition of your achievements and a test of your negotiation skills. Firms increasingly use this tier to manage risk and recruit laterals, but whether it’s right for you depends on how much clarity and opportunity you can secure in the offer.
The title alone isn’t enough. Before saying yes, do your due diligence, ask hard questions, and get commitments in writing where possible. With the right structure, non-equity partnership can be an important step on the ladder, but without safeguards, you risk getting stuck halfway up.