Sidley Becomes Latest Big Law Firm to Adopt Non-Equity Partnership Model

Big Law’s historically binary choice between equity partnership and senior associate status is giving way to a third option: a non-equity partnership tier. Staci Zaretsky writes about the trend for Above the Law.

The intermediate tier grants lawyers the title and prestige of partnership without the capital contribution or profit-sharing associated with full equity status. Sidley Austin, ranked sixth on the 2025 Am Law 100, is the latest firm to formalize this structure. Above the Law’s reporting cites an internal email distributed to all lawyers at the firm.

Cravath is widely credited with generating this wave when it established its salaried partner tier in November 2023. That decision provided institutional cover for similarly prestigious firms to follow suit. Paul Weiss, WilmerHale, Cleary, Skadden, Schulte Roth & Zabel, Debevoise, Arnold & Porter, Sullivan & Cromwell, and Freshfields each introduced comparable tiers over the subsequent two years.

Sidley’s announcement follows this accelerating pattern, further entrenching the two-tier structure as an industry norm.

Internal reaction has been mixed. Associates and counsel eligible for advancement this cycle reportedly received no advance notice that a non-equity status was under consideration. Citing an unnamed source, Above the Law reports that lawyers were reportedly furious about the additional tier on an already long ladder.

Zaretsky’s take? “Lawyers may ultimately have little choice but to get used to the new status quo, where the title of ‘partner’ doesn’t necessarily mean what it used to.”

Sidley’s move underscores important governance and talent management considerations for law firms. Those restructuring partnership tracks should evaluate their disclosure obligations to lawyers in the advancement pipeline, assess attendant fiduciary exposure, and develop strategies to stem associate attrition.

Compensation restructuring of this scale may also warrant updated partnership agreement provisions and internal equity frameworks to mitigate future disputes.