A&O Shearman Eyes Nonequity Partner Tier After BigLaw Shift
A&O Shearman is actively considering adding a nonequity partner tier for 2024 partnership decisions.
Why it matters: The expansion of nonequity tiers shifts career paths, profit allocation, and recruiting strategies for law firm leaders and rising talent. Nearly every major firm has moved in this direction in the past two years, making this a pivotal industry development.
- A&O Shearman formed via merger in May 2024, now weighs splitting partners into equity and nonequity classes.
- Cravath introduced a salaried partner track in November 2023, setting off a wave of similar moves.
- Paul Weiss (March 2024), WilmerHale (August 2024), Cleary (October 2024), and Skadden (February 2025) have all created or are planning similar tiers.
- By May 2026, only 10 Am Law 100 firms will maintain a single-tier partnership structure.
A&O Shearman, the result of Allen & Overy's merger with Shearman & Sterling last May, is weighing the introduction of a nonequity partner tier as soon as the 2024 partnership selection cycle, according to multiple reports and internal communications.
The shift would follow a surge in structural changes among top law firms, which accelerated when Cravath debuted its salaried partner tier in November 2023. The move broke a longstanding one-tier tradition and triggered industry-wide debates about partnership models.
- Paul Weiss created a new partnership category in March 2024 amid market changes (American Lawyer).
- WilmerHale formalized a nonequity tier in August 2024; Cleary followed in October. Skadden is set to implement its model in February 2025.
- As of May 2026, just 10 of the Am Law 100's largest firms will keep a single-tier partnership, showing a dramatic change from prior years (Above the Law).
Internal emails reviewed by The American Lawyer suggest that associates and counsel up for promotion this year were not advised in advance that a nonequity track might be introduced. This lack of communication has reportedly created uncertainty among senior associates seeking partnership.
While A&O Shearman has not publicly detailed the potential compensation differences or voting rights, the move signals how financial pressures and competitive benchmarking are remaking partnership ladders across elite law firms (read more).
By the numbers:
- November 2023 — Cravath launches salaried partner track.
- March 2024 — Paul Weiss establishes limited equity partners.
- 10 — Am Law 100 firms projected to retain a single-tier partnership by May 2026.
Yes, but: Many lawyers facing 2024 promotions at A&O Shearman were not alerted to possible changes in partner selection, causing frustration and confusion.
What's next: A&O Shearman is expected to announce its partnership structure for the 2024 and 2025 promotion rounds within the next quarter.