If you’re familiar with law firms, you’re probably familiar with associates and partners. Partners have an equity stake in the firm and run things. Associates work there and are paid as employees. Some, but not all, associates aspire to be partners, and the traditional BigLaw “up or out” system seems to have limited options for associates who aren’t made partner eventually.
But, there’s another set of options that are becoming increasingly popular: non-equity partners and “of counsel” positions. In this article, we’ll talk about counsel positions.
What, you might wonder, is an “of counsel” position? Here’s how the American Bar Association defines it:
- A part-time practitioner who practices law in association with a firm, but on a basis different from that of the mainstream lawyers in the firm. Such part-time practitioners are sometimes lawyers who have decided to change from full-time practice, either with that firm or with another, to a part-time one, or sometimes lawyers who have changed careers entirely, as for example former judges or government officials.
- A retired partner of the firm who, although not actively practicing law, nonetheless remains associated with the firm and available for occasional consultation.
- A lawyer who is, in effect, a probationary partner-to-be: usually a lawyer brought into the firm laterally with the expectation of becoming a partner after a relatively short period of time.
- A permanent status in between those of partner and associate, having the quality of tenure, or something close to it, and lacking that of an expectation of likely promotion to full partner status.
Source: Formal Opinion 90-357 of the American Bar Association
For example, say you have an attorney in a firm who has excellent skills, but practices in an area that’s not highly profitable (trusts and estates is a common example). Your clients sometimes need the attorney’s expertise, which is highly specialized but aren’t willing to pay a ton of money for it and don’t need it most of the time. You don’t want to send these clients elsewhere, for competitive reasons, but you also don’t want to pay this marginally profitable attorney partner-level compensation. What to do? Make them of-counsel and pay them more than an associate, but less than a partner. The advantage for the attorney is job security – they know that they’re valued by the firm and won’t be pushed out at the end of a certain number of years (as associates who don’t make partner typically will be).
Being of counsel, rather than a partner, is also an option for attorneys who prefer a more predictable, less time-intensive schedule. For many, the tradeoff of a substantially lower (but still high by any reasonable measure) salary for lower hours is a good one. People in this category could include attorneys returning to the firm after a stint in government, older attorneys interested in gradually downsizing their practice, and parents returning to the workplace who want a better work-life balance than being a law firm partner typically affords.
The Downside of an of Counsel Position
There are potentially several downsides to being of counsel rather than a partner. The most obvious is reduced pay. Attorneys who are of counsel will typically make a high associate salary, as opposed to the much higher average profits-per-partner. (Junior partners typically make much less than the average, but the upside potential of being a partner over time is much higher than being a salaried of-counsel.)
There’s also a prestige hit to being of counsel. Although this may be offset by the downsides of actually having to do the job, saying you’re a partner at a major law firm sounds impressive!
For many attorneys, however, the benefits of having an of-counsel position outweigh the downsides, and it’s a good mix of the steady income of associate life with the relative job security of partnership.