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 18 tiers on the equity partner ladder. DLA Piper says it made the unusual decision 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 has financial problems or having trouble obtaining credit. “The firm has excellent, excellent relationships with our banks and a 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 sound 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 an 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.)
- Lawyer Salaries in Baltimore
- Impact of Economic Downturn on Maryland Lawyers
- Defense of Big Firm Life
- Up to 20 DLA Piper Lawyers and Staff in UK May Lose Their Jobs (December 2, 2008 article in the ABA Journal)
- Starting Your Own Law Firm (Carolyn Elefant’s blog on starting your own law firm)