De-Equitizations of Big Law Partners - Managing Demotions

There is going on a high-stakes game in Big Law for top brandname lawyers. Chair of Paul Weiss Brad Karp calls it "an existential war for talent." Those stars receive nosebleed compensation, influence, power and access to whatever resources they need.

Simultaneously - and perhaps to balance out that huge financial investment in those powerhouse players - partners whose twinkle has dimmed are being de-equitized. That term is a euphemism for "demotion."

American Lawyer reports:

"Multiple Am Law 100 firms, as well as midsize and regional law firms, have de-equitized partners in recent months. More are likely to follow suit." 

Their book of business may be less and they're not able to develop an adequate amount of new business. Overall, they just aren't pulling in the revenue they used to or, with the bar on performance raised, they currently need to.

The demotion can entail a cut in pay. There could also be the shift from the title of "equity partner" to "counsel" or "non-equity partner." More and more law firms have established the NEP tier.

Of course, de-equitization primarily could occur when lawyers are over-50. Immediately that presents the option of retirement, at least from that law firm. When it comes to demotions in general, more than half quit. More partners are retiring in their 50s so this is an acceptable exit strategy. Easy cover story for the outside world: You retired. Packing it in. 

However, for those who want to remain with the law firm, at least until they process this career disruption, there are strategies to manage this development. They include:

See the big picture. 

Demotions are common. A figure floating around is that 14% of professionals have experienced demotions. But the percentage could be much more if "demotion' is defined broadly. That could take the form of losing the number of people supervised by you, reporting to someone younger, getting it that you have been forced off an account, being stripped of a title, a reduction in compensation or a palpable loss of influence and power. Almost 50% of HR heads reported demotions in their organizations.

You got plenty of company.

So, you're embarrassed. 

Soon enough someone in the law firm will have done something which triggers a scandal, drama and more. The heat will be off you. The Roman Catholic Church, William Shakespeare and psychologist Carl Jung were among the thought leaders explaining how flawed human beings are. You just have to sit tight for a while. It is wonderful practice in developing a thick skin to blow off the comments and smirks. 

No need to shoot yourself in the foot. 

You may need the income, even if it is significantly less, for the time being. Stay put. A lawyer who had rage quit came to me for coaching when he realized he had to find a source of income fast. He admitted it was a mistake to leave. At the time he couldn't size up the situation as a temporary state of affairs. In time - and that's what he eventually did - he could have put together a Next. 

Solicit feedback from those you not only trust but respect. 

If you are humble you get it that your previous MO was not a winning one. This awareness and the willingness to change will give you an edge in your present position and, if you want to move on, to the next one. 

Many will be working into their late 70s and beyond. The Department of Labor projects that 11% of the workforce in 2030 will consist of the over-75. In a sense you are "learning on the company." It's up to you to position and package this in your head as a mere setback and one you can use to your great advantage. 

In the 2024 book "Nobody Cares About Your Career: Why Failure Is Good," former CEO of Barstool Sports Erika Ayers Badman puts it this way:

"Falling Down is the best way to get good at getting up. Knowing how to trip get good at running."

Maybe you should try out another career path. 

That doesn't have to be a radical reinvention. Take an audit of your experience, skills and contacts. Research what's in demand and pays well. Size up where there is a fit. Or where there would be a fit if you picked up a certification. No, it won't be easy. In this article published in O'Dwyer's Public Relations I discuss the challenges career change entails. 

In this volatile economy, especially with the change in Administration, demotions will likely be on the rise. It might feel like a demotion to go from being a heavyweight in the DOJ to just-another-partner at a law firm. But this upheaval could become standard in not just the legal sector. It could be smart to play out what you would do if you were put in that situation. That can prepare you to limit the emotional and financial fallout. 

Coach Jane Genova provides end-to-end career services, ranging from diagnosis of the challenges and fix-it strategies to preparation of resume/cover letters and how to gain control of an interview. She specializes in over-50 issues. For a confidential complimentary consultation please text/phone 203-468-8579 or email janegenova374@gmail.com. Fees custom-made for your unique budget.