An increasingly competitive legal environment is resulting in changes in how law firms pay their partners.
In my experience there are three main types of partner compensation systems:
1) Equality/lockstep – Compensation is determined mainly by seniority. I’ve seen this system used by many small firms and some large US and UK firms. The advantage is it encourages partners to work as a team, while the disadvantage partners may not feel it’s fair if other partners don’t pull their weight yet are paid the same as high performers. This can lead to a lack of incentive for high performers, and creates a risk they may leave.
2) “Eat what you kill” – Compensation is determined mainly by personal production. This system is used by small and midsize firms. Objective systems like this usually focus on just the numbers, which makes it clear to all partners the expectations, and is fairly…
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