Posted On: December 3, 2008 by Ronald V. Miller, Jr.

DLA Piper Has a New Partnership Structure

The Maryland Daily Record reports DLA Piper is eliminating its two-tiered partnership structure in favor of a new arrangement where all partners are equity owners of the law firm with as many as 18 tiers on the equity partner ladder. DLA Piper says it made the unusual decision in order to reduce Piper’s outside borrowing and give income partners an ownership interest in the firm, according to joint CEO Frank Burch. “From now on, you’re a partner or you’re not a partner,” Burch said.

Burch said DLA Piper did not make the change because it is has financial problems or having trouble obtaining credit. “The firm has excellent, excellent relationships with our banks and very, very favorable credit facility, almost too favorable,” Burch said. No explanation was given as to what “almost too favorable” means. Burch also expressed a concern that he was too good looking and too charming. (Okay, I made that part up.)

The first chapter of Malcolm Gladwell’s amazing new book Outliers talks about the town of Roseto, Pennsylvania and what an incredible impact the town’s strong sense of community had in dramatically decreasing the rate of heart disease in Roseto. Eighteen partner tiers sounds like the ultimate, never ending rat race. There has always been a de facto demarcation among partners because they are paid differently. But formalizing that with a 18 tier ladder just has to add stress to many lawyers who are already feeling plenty of stress. This may lead to an anti Roseto effect: my detailed statistical analysis predicts that this system will take 1.8 years off the life of the average DLA Piper partner. (Of course, I made that up too. But you get the point.)

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