00:00if you're a big law associate you've probably heard that the transition to non-equity partner
00:04can take a big toll on your finances in the first couple years let's dive into how it works and how
00:09you can prepare ahead in the one-tier partnership model the typical path for an attorney at a law
00:14firm is to grind for eight to ten years as an associate and then buy into the partnership at
00:20that point you can share the firm's profits but the promotion typically comes with the expectation
00:25then you bring a new business in the two-tier partnership model associates typically move to
00:30non-equity or income partner after eight years from there some will become eligible for equity
00:36partnership after another few years while some will remain service partners with no business
00:41development expectations from a tax standpoint all partners at law firms are considered owners
00:47even if you don't share the profits this means that as a non-equity partner you will now be required to
00:52make quarterly estimated tax payments pay the self-employment tax and your employee benefits
00:57are no longer subsidized this often results in junior partners taking home actually less than
01:03they were as senior associates offsetting any bump in pay and that's why i recommend that my clients
01:08build a transition fund before they make partner the idea is to save the equivalent of your first two
01:14quarterly estimated payments which will give you a little breathing room to adjust to your new cash flow
01:18if you're looking for more tips on tackling the transition to partner follow me
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