Is your firm getting it ‘right’?
This time I am going to write about something really tough. I am going to write about dividing up the financial pie in a law firm.
The issue of partner compensation surfaces in every law firm and it underlies many other issues. It is often not discussed directly, but it can be the gorilla in the closet.
Lawyers ask me which compensation system I recommend because it is the “best”. There is no such thing as a “best” compensation system in the abstract. In reality, the best compensation system for a firm will be the one that embeds well over time within that firm by aligning with and reinforcing the best aspects of that firm’s unique culture. Full stop.
To determine this, a frm needs to understand its culture – the good, the bad, the ugly and the beautiful. Ten, and only then, can it make informed decisions about compensation arrangements among partners.
Relatively few firms take the time to do this right, and partner compensation arrangements can be problematic. Sometimes the problems are minor but sometimes they can be damaging.