Minders, Finders and Grinders: Towards a More Rational System of Law Firm Partner Compensation

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It’s that season of the year when management locks itself into hushed secret venues and makes determinations regarding law firm partner compensation. In recent years, we have witnessed a rapid escalation of compensation paid to Big Originators. And, as Sean Boland, the vice chairman of Howrey observed, when the big producers don’t get what they want, they bail out; in Howrey’s case, as in the case of so many before it, the defection of big producers can be fatal. The issue is not simply compensating large fee producers well. Rather, the issue is creating a compensation system in which partners are financially rewarded for integrating a client’s work throughout the firm and disincentivized from creating silo practices which are not completely integrated within the law firm.

Creating such a system requires the creation of financial rewards for the working law firm partners who roll up their sleeves and do the work as well as those who take a leadership role on particular matters, even when the matter and client was originated by another partner.

The long simmering debate over whether a client hires a lawyer or a law firm needs to be seen from the perspective of the law firm: Is it the law firm that was hired to do the work or a particular lawyer who was hired. Long term law firm financial viability demands that a law firm create a culture in which partners are rewarded for creating a firm-wide team and an ethos in which the firm is a well integrated true partnership, collectively providing outstanding legal services to clients, rather than a collection of silo practices. The personal pronoun must be rejected in favor of the collective pronoun: It’s not “my client,” rather it’s “our client.”

In an escalating competition of law firm partner free agency, is it time to determine a different way to slice the law firm profit pie to enhance the long term vitality and prosperity of the law firm? It takes a village to raise a child. It also takes a village to build an enduring law firm.

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Published In: Business Organization Updates, Firm Marketing Updates, Professional Practice Updates, Mergers & Acquisitions Updates, MLM Consulting / Network Marketing Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jerome Kowalski, Kowalski & Associates | Attorney Advertising

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Jerome Kowalski
Kowalski & Associates

Jerry Kowalski is the founder of Kowalski & Associates, which provides law firm management... View Profile »


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