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“The bar is constantly getting higher and higher to become an equity partner at a law firm, and I don’t see that changing,” Lowe said in an interview this week.

It’s not that firms don’t ultimately want to add to their equity partnership ranks. Right now, many top firms just feel they have to do it by adding rainmakers, and that also slows down the rate of promotion.

The rule of thumb used to be that partners should originate enough work to keep themselves and another attorney busy, said Kristin Stark, a consultant at Fairfax Associates. But that’s changed a lot as firms have significantly grown revenue and average profits per equity partner. “They’re not going to want to promote someone to equity partnership that’s going to have a dilutive effect on the equity partnership,” she said.

In interviews, firm leaders have also cited retirements and increased lateral movement leading to some drops in the equity tier, as well as other things in the “normal course” of operating their firms.

Some added that they didn’t see the losses manifest in their top-line performance, either.

“We had a [small] decrease in partners year over year. That was just natural attrition and people moving to new things,” Peter Michaud, chair of Ballard Spahr, told The American Lawyer. Profits per partner at the firm skyrocketed more than 20%, to a little more than $954,000, while its single-tier partnership head count dipped from 223 to 220. “But what we noticed is despite the departures, we didn’t lose any revenue,” he added.

The firm increased revenue by about 10%, to about $531.7 million.

Average profits per equity partner at White & Case surged 27%, while revenue increased about 12.5%, to more than $3.3 billion. The firm’s equity tier simultaneously fell about 7.7%. Firm chair Heather McDevitt told The American Lawyer her firm wasn’t managing to a specific ratio or number of equity and nonequity partners (which increased 12.2%). While acknowledging the decline in equity partners, she noted total partner head count still grew long-term.

“We are a high-performance firm, and people leave the firm for a number of reasons,” she said. “The slight dip in 2024 [in equity partnership] was the result of attrition and some partners leaving the equity, all of which occurred in the normal course of the firm evolving to meet our client needs and strategic priorities.”

Polsinelli CEO Chase Simmons noted “some de-equitizations and retirements,” as the firm grew profits by 31.2% while its equity tier shrank by about 15%. It also grew revenue by 12.6%, to $964.1 million. The firm’s nonequity ranks grew 14% as well, and Simmons added the firm recruited and promoted “a lot of equity shareholders in the new year that will show up in next year’s numbers.”

Cadwalader, Wickersham & Taft increased profits by 33.5%, with equity partner numbers decreasing by about 9.3%. The firm still increased revenue 15.7%, to $638.2 million in 2024. Managing partner Pat Quinn said his firm didn’t change the equity status of any existing equity partners during the year. He said attrition was responsible for the decrease in partnership count and quipped that partner mobility is “part of life in the big city.”

Lowe, of CenterPeak, noted that record-high billing rates have helped firms make more and more revenue, leading to even bigger profit gains, even if they lose some business-generating equity partners each year.

While it's a common longtime trend to clamp down on the growth of equity partner ranks. Law.com previously reported that there’s evidence the very highest-performing firms increased their equity partner ranks last year, based on bank survey data.

Meanwhile, many firms are still going forward with growth in the nonequity tier. In the sample of 18 firms, at least half increased their nonequity tier by more than 5%.

The total number of nonequity partners across the Am Law 100 is expected to surpass the equity tier in the 2024 figures or soon after.

There are long-term problems with simply dropping would-be equity partners into the nonequity trench. Consultants like Brad Hildebrandt, chair of Hildebrandt Consulting, have pointed out the negative long-term consequences of “ballooning” nonequity tiers and failing to manage that group well. And Lowe, on Friday, noted it can ultimately harm rather than help the bottom line.

“The danger of creating this giant cadre of nonequity partners is that it siphons work away from associates and can create an expensive class of working attorneys,” he said. “That can be a drain on profitability.”