Top Wall Street law firm Cleary Gottlieb Steen & Hamilton is to create a new tier of non-equity partners, leaving the ever-diminishing group of elite firms that are still wedded to a pure equity model.

The news follows rivals Cravath Swaine & Moore, Paul Weiss and WilmerHale all making the same call within the last year in a bid to retain top talent. 

Cleary said the move was an important step as it continues to “strategically grow”. 

“Innovating in this way underscores our dedication to developing and retaining talent, with the goal of continuing to provide excellent advice and service to our clients,” the firm added. 

Cleary had 180 partners in 2023, according to data published by the American Lawyer. The firm generated more than $1.4bn in total revenue, while average profit per equity partner was $4.5m. 

Cleary joins most of the Am Law 200 in having a two-tier system, which can help to attract and retain lawyers with the prestige and higher pay of the partner title, while also possibly increasing the profits of the equity partnership. 

However Cleary’s managing partner, Michael Gerstenzang, told American Lawyer that was not the firm’s motivation, but rather it was introducing the non-equity tier to “create more opportunities in promotion and development”.

The change at Cleary takes effect immediately, Reuters reported, with the firm to consider possible candidates for the new non-equity tier as part of its annual promotion process currently underway. 

The 1,100-lawyer firm promoted 15 to partner at the start of this year. 

Back in 2020 the firm also modified its lockstep to reward top-performing partners, American Lawyer reported, amid increased pressure to attract and retain star talent.