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Can Law Firm Partners Sue for Employment Discrimination?

By Wayne N. Outten and Justin M. Swartz
February 01, 2004

Traditionally, law firms were organized as “true partnerships” in which each partner had a substantial voice in firm affairs and could be subjected to unlimited liability for the debts of the firm. As high-profile cases have highlighted the risks of such a structure, however, many firms have abandoned the classic form and adopted “hybrid” business models such as professional corporations, limited liability companies and limited liability partnerships.

In these hybrid business models, firms often choose to consolidate management and control of the firms' affairs in small executive or management committees. Firms also, with increased frequency, have created tiered partnerships and “quasi-partner” positions for senior attorneys such as “of counsel,” “special counsel,” “junior partner,” or “non-equity partner.” By creating these less-than-full-partnership-positions, firms can ensure that the management of the firm remains in the hands of a few partners in the “inner circle” while retaining experienced, senior attorneys who can generate substantial revenue for the firm.

Such consolidation of control comes at a cost, however. By configuring themselves as “de facto corporations” ' placing substantial control in the hands of a few and subjecting the remaining partners to the decisions of those in power ' firms may expose themselves to employment discrimination suits brought by their own partners.

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