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Common partner compensation systems

By Brenda A. Barnes and Camille Stell Partner compensation is probably one of the most sensitive aspects of a law firm’s practice management. Whether you are adopting a new system or modifying the current one, there must be an extraordinary amount of thought, care, and study. Systems are either non-performance-based systems or performance-based systems. Here are the typical systems: Non-Performance-Based Systems: Ownership percentage: Income is allocated on relative ownership percentage. Pay equal: All partners are paid equally, or nearly so. Seniority or lock-step: Partners are paid based on years as a partner. This method is all but obsolete, however, some firms still have a baseline built into their systems for more senior partners. Performance-Based Systems: One person decides: Typically the managing partner or other designated key partner (often referred to as the… . . . read more

How to compensate managing partners

By Brenda A. Barnes and Camille Stell Law firms are not unlike other professional service firms with regard to how they compensate the leaders of their firms. Historically, the compensation of the managing partner has developed over time and correlates to the role that the partner will play in leading the firm. A successful managing partner compensation plan should include merits for developing a strategic plan, increasing lawyer and client profitability and recruitment of lateral partners. There are several fundamental approaches to managing partner compensation plans: the one-size fits-all approach, the CEO approach and the balanced approach. We will review each over the next several paragraphs. One-Size-Fits-All Approach It is not uncommon in many small to medium sized firms to treat the managing partner compensation the same as the other partners are… . . . read more

Characteristics of a modern compensation plan for lawyers

By Brenda A. Barnes and Camille Stell A successful compensation plan should reflect shared goals and values. A successful plan also requires trust among the members of the firm. A winning compensation plan aligns the values of the law firm with relevant, up-to-date market data. Here are additional components of a modern compensation plan. Evergreen Compensation plans must be constantly evolving. What worked 10 years ago is likely not working well today and what works today may not work five years from now. The legal system has faced as much change in the past 10 years as in prior decades. Everything about the system has changed, from the amount of law school debt that the majority of young lawyers have, to the changing face of legal competition. Continually reviewing and… . . . read more


6 ways to optimize your recruitment efforts

Law firms are feeling the effects of today’s talent shortage. More than three in 10 lawyers (31 percent) recently surveyed by…

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Half of today’s U.S. legal professionals have flexible work arrangements

Special Counsel, a provider of legal consulting, attorney recruiting, legal talent, legal technology and eDiscovery solutions, recently released its…

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Higher wages, better health benefits, or larger tax refunds? Survey looks at 2017 payroll trends

Every year, the American Payroll Association (APA) conducts an annual survey for National Payroll Week, with the goal of helping American employee better understand their…

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What most people would rather do than ask for a raise

Public speaking has long been thought of as a recipe for anxiety, but there’s one conversation that makes workers feel even less sure of themselves: Asking the boss for…

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