Who is Really a Firm Partner? And What does it mean when Lawyers Sue their Firms?

Katz, Marshall & Banks partner Adam Herzog was quoted in a Law360 article, “Blurry BigLaw Definition of ‘Partner’ Fuels Gender Bias Suits.” Disputes over the meaning of the term “partner” have arisen in several different lawsuits brought by junior partners alleging discrimination against the law firms for which they work.  “What it means to be a law firm partner has become completely fluid,” explains Mr. Herzog. “Junior partner is a pretty nebulous concept, and how it’s defined is going to range a lot from law firm to law firm.”

The distinction between an “employee” and a “partner” can be significant.  For example, anti-discrimination such as Title VII and various wage-and-hour statutes extend protections to employees, but not owners, of a company or organization.   Similarly, different arbitration rules can govern depending on whether one of the parties is considered an “employee” or not.  Many law firm partner agreements include mandatory arbitration provisions.  Some plaintiffs have argued that such provisions are not applicable to their claims because they are truly “employees” of the firms and suing under employee-protection statutes not subject to the arbitration provisions.    

While law firms have increased the number of individuals nominally titled “partner” over the years, that does not necessarily mean those attorneys are granted true management powers or benefits of ownership.  They often remain “employees” in the commonly understood meaning of the phrase, despite what their business cards say. 

In California and elsewhere, many recent cases in which junior partners have sued their firms for gender discrimination have shown this this issue to be one of more than mere semantics. 

Mr. Herzog notes that certain jurisdictions allow for liability against individuals, not just companies.  As a result, the question of whether an attorney is an “employee” or “partner” can make the difference as to whether he or she faces personal exposure and litigation risk.   

“If you’re a high-level firm manager, that could mean in D.C. you’re more likely to be sued under your individual capacity as well, so that’s also a factor here.”

Read the full article here.