Big Firm Partners: Not Much More Than Small Time Employees

Big firm partnership.  In many legal circles, big firm partnerships are regarded as the brass ring, the peak of the legal mountain.  Law students dream of them, young associates sacrifice their personal lives to 80 hour work weeks to vie for them while even federal judges leave the bench for them, succumbing to the temptation of high six figure profit draws.  But partnerships aren’t just about money and lavish lifestyle (as Anonymous Lawyer would have you believe).  Partners are the boss, but more than that, they’re owners – members or shareholders (the new trendy terms for partners these days) in multimillion dollar global enterprises.

Or are they?  Just as the Anonymous Lawyer exposed the empty soul
of law firm partners, now, an EEOC lawsuit draws the curtain back further, revealing that partners aren’t partners at all, but mere employees who have little control over the actual workings of the law firm they purportedly own.  As reported in EEOC Sues Top Firm Alleging Discrimination, Anthony Lin, New York Lawyer (1/14/05), the EEOC has sued biglaw powerhouse Sidley, Austin for engaging in age discrimination by demoting or forcing the retirement of 32 partners in their late fifties and early sixties because of their age.   But since age discrimination laws only apply to employees, the EEOC has argued that demoted partners were effectively employees because they had no real say in how the firm was run.  According to the article:

In an opinion by Judge Richard Posner in 2002, the U.S. Court of Appeals for the Seventh Circuit held that the EEOC had sufficiently shown that the affected lawyers could be considered employees in order to proceed with its investigation and subpoena the firm.

Judge Posner pointed to the highly centralized management of the law firm, in which partners never voted on issues, and a self-selecting executive committee that made all major decisions, in suggesting that the partners could, in fact, be employees.

The judge said that, while Sidley Austin was clearly a partnership, the “question is whether, when, a firm employs the latitude allowed to it by state law to reconfigure a partnership in the direction of making it a de facto corporation, a federal agency enforcing federal antidiscrimination law is compelled to treat all the ‘partners’ as employers.”

After reading this article, I had two thoughts.   First,  I was troubled that  law partners would need to portray themselves as employees to prevail in this case, just as I was also troubled that  contract attorneys needed to portray themselves as unskilled hired help in their fight for overtime wages. That skilled attorneys would have to degrade  themselves by portraying themselves as less than what they are to bring a lawsuit (even if the principles behind the suits are correct) just seems so sad.   But perhaps even more sad is to spend one’s life believing that you’re an owner of an organization only to have it throw you out when you’re too old or undesireable.  That something like that can happen to people as hardworking and able as large firm partners just goes to show that large firm partners really aren’t owners – they really are nothing more than humble employees at the mercy of others like everyone else.

I may never earn the $875,000 annual profits that the Sidley partners did (though perhaps I will – beauty of solo practice is you really never know).  But at least, my law firm belongs to me – as my daughters would say, it’s mine, all mine.   And that gives me a sense of satisfaction and independence that even $875,000 in profits apparently can’t buy.