Canadian Lawyer

what they generate," points out Harper. Pekarsky Stein recruitment firm in Calgary, non- equity partner positions have been a useful tool for some local firms that are reluctant to dilute the profit pool but want to retain talented lawyers. "There's lots of examples of firms who have gone two, three, four, five years with no new equity partners. The problem is those people you are passing over, According to Adam Pekarsky, who runs the is supposed to be temporary, but the cynic would say that's only because firms can't get away with extending it." The danger, according to Harper, comes when " he says. "Non-equity partnership deal of risk putting up that amount to ensure firm does well. firms have some success evolving the position from a transitory state to a permanent one, some- thing he notes is happening more frequently. "Once it becomes clear that you're staying there, these lawyers become second-class citizens. They know it, and everyone at the firm knows it. They're delegated the work nobody else wants to do, and it gets very demoralizing. with more exacting requirements from law firms, has made their search for potential equity part- ners more difficult. If a firm hires 10 articling students, he says they'll do well for one of them to end up as an equity partner a decade later. "Organic, homegrown partners are a rare breed. It's no longer the brass ring for the vast majority of young lawyers entering the profession," he says. "There's so much more pressure on lawyers to do more, that partnership becomes a less appealing prospect. The personal sacrifice is too much for many in a time when both spouses work." One Bay Street non-equity partner finds him- torn in exactly that way. In a position to Pekarsky says a generational shift, combined " self apply for equity partnership, he's not so sure it's the right option. "There's always that sense that I'm perhaps not getting as much as I might, but I'm comfortable where I am with the certainty of income. It makes sense so long as they continue to pay me well, tive proposition at a time when equity partner draws are limited. "They want you to pony up, and for what exactly? The market is constrict- ing, if anything, and everyone thinks they're [McCarthy Tétrault]," he says. "There's a great And a six-figure buy-in is not an overly attrac- " he says. Housser & Tupper LLP, says there's a five- to seven-year window for income partnership, the non-equity version at his Vancouver firm. He views it very much as a temporary station for equity partner candidates, who have a few years to move up or move on. "The big step to me is entry to income partnership. Some don't develop quite as you expected, but if you're not sure about someone, then they shouldn't become income partners, because the plan is that within a reason- able amount of time they're going to make it to equity, Simon Margolis, the managing partner at Bull " with a bunch of people stuck there." managing partner Ian Dantzer seems aware of the potential underclass described by Harper, bris- tling at the term "two-tier" to describe the firm's partnership structure. "Two-tier is a tough word because it implies one is better than the other. We have a path to equity partnership, " Margolis says. "You don't want to end up At the London, Ont., office of Lerners LLP, "Non-equity partnership is a testing ground, an intermediate stage between associate and equity partnership. It gives them greater tools and status to go out and market themselves, generate work, and build a practice. " he says. " DE-EQUITIZATION partners in unless they have their own book of business, and you kick them out if they can't keep it. We eat our own if they can't sustain themselves and pay for some others," says McKenna. The most vulnerable to de-equitization are E make sure they stay there. "You don't allow ven lawyers who have finally arrived at the promised land of equity partnership must constantly look over their shoulder to lawyers whose promotions were well timed, gain- ing admission to the partnership in better eco- nomic times, when firms were a little less strin- gent with entry requirements. "We went through a period in the 1980s and 1990s, where if you put in your six to eight years, it didn't matter, you were just made a partner. Later on, we assessed those partners, and decided maybe they weren't the right material for us," says McKenna. "Some www.CANADIAN Lawyermag.com JULY 2012 29

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