It is widely recognized that Big Law has surplus partner capacity. In a recent Altman Weil survey, over two-thirds of firm leaders reported their equity partners were not sufficiently busy; nearly 80 percent said the same of nonequity partners. What is less well recognized is just how massive this surplus has become, how unevenly it is spread across firms in different profitability cohorts, and what it portends for when the next downturn hits.
The last time partners were fully utilized was in 2007, the year before the great recession hit. Table 1 shows how the partner ranks of the Am Law 200 have grown since that time by firm profitability cohort (PPP 1-50 refers to the 50 highest profit firms by profit per equity partner, PPP). In aggregate, the number of partners has grown by 21 percent. Growth of equity partners has been relatively modest (only 8 percent) while that of nonequity partners has been dramatic (45 percent). It is noteworthy that the highest PPP firms (PPP 1-50) have barely grown their equity ranks and that the PPP 101-150 actually shrank theirs. The second 50 firms, those in the PPP 51-100 cohort, stand out as having grown both their equity and nonequity ranks considerably ahead of the other profitability cohorts.
