Source: Adam Smith Esq.
The legal industry’s landscape is witnessing a historic transformation as Cleary Gottlieb, one of the last bastions of single-tier partnership, embraces the two-tier model. This shift marks more than just an organizational change—it signals the definitive end of an era in Big Law.
The Numbers Tell the Story
The statistics are striking: from 200 single-tier firms in the AmLaw 200 not long ago, we’re down to approximately a dozen. Even more telling is the trajectory of Non-Equity Partners versus Equity Partners, with the former on a steady upward climb while the latter remains flat. At the current rate, Non-Equity Partners will soon outnumber their Equity counterparts.
The Official Narrative vs. Economic Reality
While Cleary’s managing partner Michael Gerstenzang frames the change as creating “more opportunities for people to become equity partners,” the economic subtext is clear. When pressed about potential lateral hires, Gerstenzang confirmed the firm would consider $16-20 million for the right candidate—a telling indication that market pressures, not just professional development, are driving this transformation.
A Broader Perspective
Perhaps the most intriguing aspect is how law firms maintained this unusual two-tier workforce structure for so long. As the article pointedly notes, such stratification is rare across other sectors—from manufacturing to academia to healthcare. This raises questions about why the legal industry held onto this model well past its expiration date.
The Market Forces at Play
Despite Gerstenzang’s insistence that “We didn’t do this because we wanted talent leverage,” the timing suggests otherwise. In today’s competitive legal market, firms need flexibility in their partnership structures to attract and retain talent while maintaining profitability.
Looking Ahead
With Cleary’s conversion, the single-tier partnership model appears headed for extinction in Big Law. The question isn’t whether other firms will follow—it’s how quickly they’ll adapt to this new reality where partnership structures must balance talent development, market competitiveness, and economic sustainability.
Read more: Adam Smith Esq.
