• More law firms are setting minimum revenue expectations for partners, typically between $5 million and $7 million in client business annually.

• This shift is driven by increasing competition, placing pressure on partners to bring in substantial client work to remain competitive.

• Partnership tiering has also led to an increase in expectations.

Law firms across the U.S. are raising the bar for partners, increasingly setting revenue expectations as they place a higher focus on profitability, according to a Law.com report. 

Expectations and penalties for failing to meet them vary by firm, with top firms setting earning expectations between $5 million and $7 million in client business annually, New York recruiter and Parrillo Search Group founder Mike Parrillo said. 

• Law firms with institutional client relationships may not be checking levels of business each year for each partner but still do every few years, and many are looking at it much more closely.

• Other top law firms are holding back compensation points for not meeting collections or realization goals.

Increasing Profits, Tiered Partnership Push

The race to increase profits per equity partner is the reason firms are being more strict about partner expectations at the moment, said Susan Mendelsohn, a Chicago-based legal recruiter. However, some firms believe trying to grow in profits per equity partner too quickly can sacrifice culture, she added.

The increase in firms moving to two-tiered partnerships, and even adding "super tiers," has also fed into the dialogue about earnings and other performance expectations for partners, said Kristin Stark, a law firm consultant and a principal at Fairfax Associates.

With billing rates growing to new heights, both equity and nonequity partner performances have risen, she noted, adding that this can create more of a gap within the equity partnership. 

"In the equity group, you have people with really large books, and some people with more modest books. And when there's enough with the large books, they start to feel like they're carrying others on their backs," Stark said. "And they say, 'Shouldn't we establish higher expectations?'"

Staying Competitive

The new standards reflect the growing pressure on firms to stay competitive in a market where high-stakes, high-revenue matters are key to success. While expectations have always existed, firm leaders are now being more communicative about what kind of hard work they want to see. 

"It's the firms' way of basically saying, 'If you are not actively participating in the growth that the firm is experiencing, you're not going to share in that in the same way you might have historically," said Scott Yaccarino, a recruiter and co-founder of Empire Search Partners.