In a strategic move to enhance attorney retention and create more pathways to partnership, Sullivan & Cromwell, ranked as the 25th top firm nationwide by gross revenue, has recently unveiled its nonequity partner tier and a new bonus scheme. This development follows a trend where several high-profile Biglaw firms have adopted similar models to stay competitive in the legal market.

Historically, the legal industry favored a single partnership track, but the landscape is shifting. Notable firms like Cravath and Paul Weiss have already paved the way by introducing nonequity tiers, setting a precedent that others, including WilmerHale, Cleary, and Debevoise, have followed. Sullivan & Cromwell’s introduction of an "income partner" position is designed to work in concert with equity partners, maintaining firm ownership and governance while fostering new promotion opportunities.

The firm has not specified the exact number of positions available for this new tier but emphasizes a rigorous standard for selection. According to internal sources, the objective is not only to fill these spots but to prepare income partners for future equity status, continuing to promote some associates directly to equity partnership.

Complementing the structural change, Sullivan & Cromwell is also innovating its bonus system. A newly implemented "discretionary enhanced associate bonus" program will reward third-year associates and above who rank in the top 10% of their practice group by hours. This bonus is calculated based on billable and pro bono hours, along with other contributions to the firm, aiming to acknowledge those who exceed standard expectations.

Furthermore, the firm is boosting its recruitment efforts with a lucrative lawyer referral bonus program. Associates who refer a new lawyer to the firm will receive a $50,000 bonus, distributed in two parts: half upon the new lawyer’s commencement and the remainder after their first year of service.

With these changes, Sullivan & Cromwell is actively reshaping its approach to lawyer development, compensation, and retention. As the legal industry continues to evolve, these enhancements could set a new standard for how firms attract, promote, and retain talent. The success of these initiatives remains to be seen, and the legal community will be watching closely. For more detailed insights, you can read the full report on the American Lawyer’s website.

Is your firm considering similar changes? Share your insights with us, as we continue to monitor this trend across the legal sector.