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An Empirical Study Of Single-Tier Versus Two-Tier Partnerships In The Am Law 200, William D. Henderson
An Empirical Study Of Single-Tier Versus Two-Tier Partnerships In The Am Law 200, William D. Henderson
Articles by Maurer Faculty
During the last decade, many of the nation's largest law firms have converted from single-tier to two-tier (or multi-tier) partnerships. A two-tier firm contains separate tracks for equity and nonequity partner. The equity tier typically controls the firm and enjoys a larger per capita share of the firm's profits. At present, two-tier partnerships make up 80 percent of Am Law 200. The conventional explanation for the growth of the two-tier system (or, conversely, the abandonment of the single-tier) is that it produces higher profits per equity partner (PPP), thus solidifying the prestige of the firm and improving its ability to …