• Paul Weiss tripled its partner class size, promoting 34 new partners under its newly implemented non-equity partner tier.

• The non-equity tier aligns with a growing industry trend, offering firms more flexibility in talent management.

• Litigation and M&A were the most represented departments in the new partner class.

• Meanwhile, Steptoe announced a revamped associate compensation system with three full-time billable-hour tracks, with corresponding pay scales and promotion opportunities.

Paul Weiss has announced 34 new partner promotions for 2024, nearly tripling its class size from recent years, according to a Bloomberg Law report. 

• This marks the first year the firm has implemented a non-equity partner tier, a move designed to remain competitive in the race for top legal talent.

• The firm declined to specify how many of the new partners are non-equity, a designation that grants the partner title without a share in the firm’s profits. 

• According to Paul Weiss chairman Brad Karp, the shift was necessary to compete with other firms offering faster paths to partnership.

Strategic Adaptation

The non-equity tier, which has gained traction across the legal industry in recent months, offers firms flexibility to promote high-performing associates while managing costs. 

The new class includes both equity and “income” partners, a firm spokeswoman confirmed in a statement. “We maintain exceptionally high standards for promotion to partnership, and each of our new partners exemplifies our firm’s dedication to practice excellence and client service,” the spokeswoman said.

Karp acknowledged initial skepticism but ultimately embraced the model to prevent senior associates from being recruited away by competitors.

• Paul Weiss’s 2024 partner class included 12 litigators and 8 M&A lawyers, reflecting the firm’s strength in these core areas. 

• The firm had promoted 11 new partners in 2023 and 9 in 2022, highlighting the significant expansion this year.

Industry Trend

Paul Weiss is not alone in adopting the non-equity model, which has become increasingly common in high-profit firms. Few firms publicly distinguish between equity and non-equity partners in their announcements, but the practice provides a way to balance career progression with financial management.

Steptoe’s Revamped Associate Compensation

Meanwhile, Steptoe & Johnson is also making waves with a new associate compensation system launching next month, according to an American Lawyer report. 

“The program is focused on recognizing that each associate's career path may be different. Not everyone fits in the same box, and we're really trying to meet associates and let them take ownership and control over their career path and develop a program that allows them to do that,” said Steptoe partner Kate Cappaert, who is helping oversee the firm’s new associate program.

Three Full-time Billable-Hour Tracks

The firm will offer three full-time billable-hour tracks with corresponding pay scales, giving associates flexibility to choose their workload:

• 1,800 hours: Associates follow the current pay scale, starting at $215,000 for first years.

• 2,000 hours: Compensation starts at $225,000 for first years, increasing to $502,500 for eighth years.

• 2,200 hours: Associates earn $236,250 at the entry level, rising to $581,750 for eighth years.

Each track includes bonuses for exceeding billable-hour targets, orientation bonuses for client development, and a requirement of 200 hours of pro bono and nonbillable work.

Associates can also choose reduced-hour budgets below 1,800 hours, with compensation pro-rated accordingly. Annual reviews will assign default budgets, but associates can opt for lower workloads if desired.

Alongside the revamped associate compensation model, Steptoe is rolling out increased training for assigning attorneys and associates, check-ins on career goals, expanded mentor programs, among other programming for its associates.