The Kirkland Effect: How Non-Equity Partnership Is Redefining Big Law
US firms have redefined the partnership model - now the UK elite are under pressure to follow.
Contents
US firms have normalised promoting associates to non-equity partner status as early as six years' PQE - protecting their best talent from getting poached, boosting margins and pressuring UK firms to follow.
Magic Circle firms like Freshfields are now preparing to introduce non-equity partnership tracks, ending long-standing all-equity traditions.
The approach can boost profitability but raises questions around the long-term value of the partner title and how clients perceive what they are paying for.
The Overview
To many, the phrase "non-equity partner" sounds contradictory. If you are a partner, by definition you have a slice of the equity and you're entitled to a share of the firm's profits. But that distinction has steadily eroded - first in the US and increasingly in the UK.
Kirkland & Ellis has famously championed the model to grow faster while keeping equity concentrated among rainmakers. The US giant made up 200 new "partners" in 2024, following a record 205-strong round the year before. Most are understood to have been given non-equity status. Promotions start from as little as six years' post-qualification experience.
Most major US firms have followed, seeing they could promote senior associates in title without giving up cherished profit points. Paul Weiss succumbed last year, by which point 86 of the 100 highest-grossing US law firms had implemented some version of non-equity partnership.
Scott Gibson, founder of elite legal recruiter Edwards Gibson, says the trend began in the US but is now starting to have a big impact on the London market. In his view, it’s now an "essential defensive tool in the war for talent."
The differences in structure are important. In the US, non-equity partners are effectively salaried employees with bonuses. In the UK, to avoid triggering expensive things like employers' national insurance, LLPs must comply with strict rules and treat their "salaried" partners as self-employed just like regular equity partners. So firms typically grant them fixed equity shares - points that entitle them to a pre-set slice of profits without the upside of true equity.
Luke Mitchinson, former City lawyer and founder of recruitment consultancy ARMA Search, says that while firms publicly present these partners as part of the same partnership, privately within the firm they're seen as a separate tier.
The logic for firms is clear: promote faster, pay less, bill more and protect the economics at the top. For lawyers, the tradeoff is more complicated - faster ladder climbing and a better title, yes, but a smaller stake in success.
Non-equity partnership is now an essential defensive tool in the war for talent.
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The bottom line
Non-equity partnership is an economic lever for firms. It allows them to capture higher billing rates without materially diluting the profit pool.
Data from recruiter Major, Lindsey & Africa in 2024 showed that on average equity partners at US firms earned more than three times as much as non-equity partners, despite being billed out at only 26% more per hour. That margin makes the model highly profitable: firms can market a lawyer as a "partner", charge accordingly, and pay them materially less.
Kirkland, again, is the reference point. It's been reported previously that the average non-equity partner there bills nearly $2 million more than they are paid annually. Over time, this differential has helped the firm grow revenue without compromising profit per equity partner, which remains among the highest in the industry. (Although, we should note, chairman Jon Ballis has publicly challenged that idea - see below.)
Billing rates keep rising, too. Between 2022 and 2024, average rates increased 39% for equity partners and 31% for non-equity partners, according to Major, Lindsey & Africa's research. The growth underscores how aggressively firms are monetising their most productive lawyers, especially as private equity and transactional demand has surged.
Law Firm | Trainee First Year | Trainee Second Year | Newly Qualified (NQ) |
|---|---|---|---|
| Addleshaw Goddard | £52,000 | £56,000 | £100,000 |
| Akin Gump | £60,000 | £65,000 | £174,418 |
| A&O Shearman | £56,000 | £61,000 | £150,000 |
| Ashurst | £57,000 | £62,000 | £140,000 |
| Baker McKenzie | £56,000 | £61,000 | £140,000 |
| Bird & Bird | £47,000 | £52,000 | £102,000 |
| Bristows | £46,000 | £50,000 | £88,000 |
| Bryan Cave Leighton Paisner | £50,000 | £55,000 | £115,000 |
| Burges Salmon | £47,000 | £49,000 | £72,000 |
| Charles Russell Speechlys | £50,000 | £53,000 | £88,000 |
| Cleary Gottlieb Steen & Hamilton | £57,500 | £62,500 | £164,500 |
| Clifford Chance | £56,000 | £61,000 | £150,000 |
| Clyde & Co | £47,000 | £49,500 | £85,000 |
| CMS | £50,000 | £55,000 | £120,000 |
| Cooley | £55,000 | £60,000 | £157,000 |
| Davis Polk | £65,000 | £70,000 | £170,000 |
| Debevoise | £55,000 | £60,000 | £173,000 |
| Dechert | £55,000 | £61,000 | £165,000 |
| Dentons | £50,000 | £54,000 | £100,000 |
| DLA Piper | £52,000 | £57,000 | £130,000 |
| Eversheds Sutherland | £46,000 | £50,000 | £110,000 |
| Farrer & Co | £47,000 | £49,000 | £88,000 |
| Fieldfisher | £48,500 | £52,000 | £95,000 |
| Freshfields | £56,000 | £61,000 | £150,000 |
| Fried Frank | £55,000 | £60,000 | £175,000 |
| Gibson Dunn | £60,000 | £65,000 | £180,000 |
| Goodwin Procter | £55,000 | £60,000 | £175,000 |
| Gowling WLG | £48,500 | £53,500 | £98,000 |
| Herbert Smith Freehills Kramer | £56,000 | £61,000 | £145,000 |
| HFW | £50,000 | £54,000 | £103,500 |
| Hill Dickinson | £43,000 | £45,000 | £80,000 |
| Hogan Lovells | £56,000 | £61,000 | £140,000 |
| Irwin Mitchell | £43,000 | £45,000 | £76,000 |
| Jones Day | £56,000 | £65,000 | £160,000 |
| K&L Gates | £50,000 | £55,000 | £115,000 |
| Kennedys | £43,000 | £46,000 | £85,000 |
| King & Spalding | £55,000 | £60,000 | £165,000 |
| Kirkland & Ellis | £60,000 | £65,000 | £174,418 |
| Latham & Watkins | £60,000 | £65,000 | £174,418 |
| Linklaters | £56,000 | £61,000 | £150,000 |
| Macfarlanes | £56,000 | £61,000 | £140,000 |
| Mayer Brown | £55,000 | £60,000 | £135,000 |
| McDermott Will & Emery | £65,000 | £70,000 | £174,418 |
| Milbank | £65,000 | £70,000 | £174,418 |
| Mills & Reeve | £45,000 | £47,000 | £82,000 |
| Mischon de Reya | £47,500 | £52,500 | £95,000 |
| Norton Rose Fulbright | £50,000 | £55,000 | £135,000 |
| Orrick | £55,000 | £60,000 | £160,000 |
| Osborne Clarke | £54,500 | £56,000 | £94,000 |
| Paul Hastings | £60,000 | £68,000 | £173,000 |
| Paul Weiss | £55,000 | £60,000 | £180,000 |
| Penningtons Manches Cooper | £48,000 | £50,000 | £83,000 |
| Pinsent Masons | £49,500 | £54,000 | £105,000 |
| Quinn Emanuel | n/a | n/a | £180,000 |
| Reed Smith | £50,000 | £55,000 | £125,000 |
| Ropes & Gray | £60,000 | £65,000 | £165,000 |
| RPC | £46,000 | £50,000 | £90,000 |
| Shoosmiths | £43,000 | £45,000 | £97,000 |
| Sidley Austin | £60,000 | £65,000 | £175,000 |
| Simmons & Simmons | £52,000 | £57,000 | £120,000 |
| Skadden | £58,000 | £63,000 | £173,000 |
| Slaughter and May | £56,000 | £61,000 | £150,000 |
| Squire Patton Boggs | £47,000 | £50,000 | £110,000 |
| Stephenson Harwood | £50,000 | £55,000 | £100,000 |
| Sullivan & Cromwell | £65,000 | £70,000 | £174,418 |
| Taylor Wessing | £50,000 | £55,000 | £115,000 |
| TLT | £44,000 | £47,500 | £85,000 |
| Travers Smith | £54,000 | £59,000 | £120,000 |
| Trowers & Hamlins | £45,000 | £49,000 | £80,000 |
| Vinson & Elkins | £60,000 | £65,000 | £173,077 |
| Watson Farley & Williams | £50,000 | £55,000 | £102,000 |
| Weightmans | £34,000 | £36,000 | £70,000 |
| Weil Gotshal & Manges | £60,000 | £65,000 | £170,000 |
| White & Case | £62,000 | £67,000 | £175,000 |
| Willkie Farr & Gallagher | £60,000 | £65,000 | £170,000 |
| Withers | £47,000 | £52,000 | £95,000 |
| Womble Bond Dickinson | £43,000 | £45,000 | £80,000 |
Rank | Law Firm | Revenue | Profit per Equity Partner (PEP) |
|---|---|---|---|
| 1 | DLA Piper* | £3,010,000,000 | £2,400,000 |
| 2 | Clifford Chance | £2,300,000,000 | £2,040,000 |
| 3 | A&O Shearman | £2,200,000,000 | £2,200,000 |
| 4 | Hogan Lovells | £2,150,000,000 | £2,200,000 |
| 5 | Freshfields | £2,120,000,000 | Not disclosed |
| 6 | Linklaters | £2,100,000,000 | £1,900,000 |
| 7 | Norton Rose Fulbright* | £1,800,000,000 | £1,100,000 |
| 8 | CMS** | £1,620,000,000 | Not disclosed |
| 9 | Herbert Smith Freehills | £1,300,000,000 | £1,300,000 |
| 10 | Ashurst | £961,000,000 | £1,300,000 |
| 11 | Clyde & Co | £844,000,000 | £739,000 |
| 12 | Eversheds Sutherland | £749,000,000 | £1,300,000 |
| 13 | BCLP* | £661,000,000 | £748,000 |
| 14 | Pinsent Masons | £649,000,000 | £793,000 |
| 15 | Slaughter and May*** | £625,000,000 | Not disclosed |
| 16 | Simmons & Simmons | £574,000,000 | £1,076,000 |
| 17 | Bird & Bird** | £545,000,000 | £696,000 |
| 18 | Addleshaw Goddard | £495,000,000 | Not disclosed |
| 19 | Taylor Wessing | £480,000,000 | £915,000*** |
| 20 | Osborne Clarke** | £456,000,000 | £771,000 |
| 21 | Womble Bond Dickinson | £448,000,000 | £556,000 |
| 22 | DWF | £435,000,000 | Not disclosed |
| 23 | Fieldfisher | £407,000,000 | £966,000 |
| 24 | Kennedys | £384,000,000 | Not disclosed |
| 25 | DAC Beachcroft | £325,000,000 | £700,000 |
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The talent equation
Firms justify the model not only on profitability but also as a way to solve retention problems. In practice, it does both.
The rapid expansion of non-equity partnership has been a recruitment tactic as much as an operational one as firms are able to offer partnership titles to lawyers who would still be senior associates elsewhere.
"The carrot of day-one partnership makes luring top talent infinitely easier", Gibson says. "It’s also a way to stop rivals from poaching your best associates."
Once a handful of firms begin offering accelerated promotions, others have little choice but to follow. Mitchinson puts it plainly: "The crux of it all is money. The prestige argument is collapsing. The firms that resist the change will struggle to retain their people."
Freshfields is the most closely watched example among UK-headquartered firms. The firm has long operated a pure equity partnership (like most elite UK firms) but is understood to be preparing to introduce a non-equity track. Insiders say the move is partly driven by its expansion in the US, where the expectation for faster promotions is now entrenched. It’s clearly also a defensive move to protect the firm from losing top associates to US rivals offering day-one partnership.
For now, the details remain under wraps: at what seniority the track starts, whether it replaces existing pathways and how aggressively it will be marketed. But the direction is clear. For elite UK firms, adopting the model may very soon no longer be optional if they want to counter what has become an almost existential threat from US rivals in London.
The prestige argument is collapsing. The firms that resist the change will struggle to retain their people.
What Insiders Are Saying
"The widespread abandonment of all-equity partnerships, and the corresponding rise of non-equity partnerships at once highly conservative US firms has enabled them to free up partnership points and upwardly stretch their top of equity to attract and retain star rainmakers.
"In the longer term, the firms which have added a non-equity cadre of partners to their ranks will find that it both elevates partner recruitment and increases partner attrition."
- Scott Gibson, Edwards Gibson
"It’s extremely clever. You protect your equity, keep your rainmakers and promote your junior talent early."
"I always ask senior associates: would you rather stay put and maybe make junior partner in four years, or be a Kirkland partner now, build a book, and move anywhere you want? It’s a very different proposition."
- Luke Mitchinson, ARMA Search
"To suggest this [non-equity partnership] is a silver bullet for excess profitability is a mirage."
- Jon Ballis, Kirkland & Ellis chairman, speaking on the Law, Disrupted podcast in August 2024.
"I resisted the change for decades. The reason we're doing it is to remain competitive with our peers. A number of our peers will circle our talented senior associates and say 'I will make you a partner' - we lost a lot of talent. I was finally persuaded that the loss of talent was too great."
- Brad Karp, Paul Weiss chairman, speaking on the Law, Disrupted podcast in July 2024.
What's Next
The trend appears to be an ultimatum to firms. Either adapt to current market forces and follow suit or risk losing your best junior talent. The move may have once been avant-garde but it is now the status quo among the US firms setting the pace in the global race for the best legal talent.
For firms, the risk is that the non-equity track becomes a holding pen - where lawyers are promoted in title but never advance further. Over time, that dynamic could fuel disillusionment and exit to competitors. There are also questions about how setting the expectation of a partnership tap at six or seven years’ PQE will affect associates who don’t get it. For those left out, the message isn’t exactly reassuring.
Clients may also begin to question whether they are paying premium rates for lawyers who, despite their titles, lack the experience traditionally associated with partnership. A widening gap between billing rates and perceived value could eventually push firms to adjust their models once more.
Still, the wheels are in motion. As Mitchinson put it, "It's an ultimatum. You adapt or you lose talent - and with it, profit."
| Firm | London office since | Known for in London |
|---|---|---|
| Baker McKenzie | 1961 | Finance, capital markets, TMT |
| Davis Polk | 1972 | Leveraged finance, corporate/M&A |
| Gibson Dunn | 1979 | Private equity, arbitration, energy, resources and infrastructure |
| Goodwin | 2008 | Private equity, funds, life sciences |
| Kirkland & Ellis | 1994 | Private equity, funds, restructuring |
| Latham & Watkins | 1990 | Finance, private equity, capital markets |
| Milbank | 1979 | Finance, capital markets, energy, resources and infrastructure |
| Paul Hastings | 1997 | Leveraged finance, structured finance, infrastructure |
| Paul Weiss | 2001 | Private equity, leveraged finance |
| Quinn Emanuel | 2008 | Litigation |
| Sidley Austin | 1974 | Leveraged finance, capital markets, corporate/M&A |
| Simpson Thacher | 1978 | Leveraged finance, private equity, funds |
| Skadden | 1988 | Finance, corporate/M&A, arbitration |
| Weil | 1996 | Restructuring, private equity, leverage finance |
| White & Case | 1971 | Capital markets, arbitration, energy, resources and infrastructure |
| Law firm | Type | First-year salary |
|---|---|---|
| White & Case | US firm | £32,000 |
| Stephenson Harwood | International | £30,000 |
| A&O Shearman | Magic Circle | £28,000 |
| Charles Russell Speechlys | International | £28,000 |
| Freshfields | Magic Circle | £28,000 |
| Herbert Smith Freehills | Silver Circle | £28,000 |
| Hogan Lovells | International | £28,000 |
| Linklaters | Magic Circle | £28,000 |
| Mishcon de Reya | International | £28,000 |
| Norton Rose Fulbright | International | £28,000 |
Law Firm | Trainee First Year | Trainee Second Year | Newly Qualified (NQ) |
|---|---|---|---|
| A&O Shearman | £56,000 | £61,000 | £150,000 |
| Clifford Chance | £56,000 | £61,000 | £150,000 |
| Freshfields Bruckhaus Deringer | £56,000 | £61,000 | £150,000 |
| Linklaters | £56,000 | £61,000 | £150,000 |
| Slaughter and May | £56,000 | £61,000 | £150,000 |
Law Firm | Trainee First Year | Trainee Second Year | Newly Qualified (NQ) |
|---|---|---|---|
| A&O Shearman | £56,000 | £61,000 | £150,000 |
| Clifford Chance | £56,000 | £61,000 | £150,000 |
| Freshfields Bruckhaus Deringer | £56,000 | £61,000 | £150,000 |
| Linklaters | £56,000 | £61,000 | £150,000 |
| Slaughter and May | £56,000 | £61,000 | £150,000 |
Law Firm | Trainee First Year | Trainee Second Year | Newly Qualified (NQ) |
|---|---|---|---|
| Ashurst | £57,000 | £62,000 | £140,000 |
| Bryan Cave Leighton Paisner | £50,000 | £55,000 | £115,000 |
| Herbert Smith Freehills | £56,000 | £61,000 | £145,000 |
| Macfarlanes | £56,000 | £61,000 | £140,000 |
| Travers Smith | £54,000 | £59,000 | £120,000 |
| Firm | Merger year | Known for in London |
|---|---|---|
| BCLP | 2018 | Real estate, corporate/M&A, litigation |
| DLA Piper | 2005 | Corporate/M&A, real estate, energy, resources and infrastructure |
| Eversheds Sutherland | 2017 | Corporate/M&A, finance |
| Hogan Lovells | 2011 | Litigation, regulation, finance |
| Mayer Brown | 2002 | Finance, capital markets, real estate |
| Norton Rose Fulbright | 2013 | Energy, resources and infrastructure, insurance, finance |
| Reed Smith | 2007 | Shipping, finance, TMT |
| Squire Patton Boggs | 2011 | Corporate/M&A, pensions, TMT |
Law Firm | Trainee First Year | Trainee Second Year | Newly Qualified (NQ) |
|---|---|---|---|
| Ashurst | £57,000 | £62,000 | £140,000 |
| Bryan Cave Leighton Paisner | £50,000 | £55,000 | £115,000 |
| Herbert Smith Freehills Kramer | £56,000 | £61,000 | £145,000 |
| Macfarlanes | £56,000 | £61,000 | £140,000 |
| Travers Smith | £54,000 | £59,000 | £120,000 |
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