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12 Tips to Enhance Your Firm's Partner Compensation System

BY Joel A. Rose
April 02, 2014

There are numerous characteristics that account for compensation systems that are perceived by partners as being fair and equitable. These include the system itself and how the system is administered. Below is a list of compensation criteria that are considered by most firms when setting partner compensation.

  1. Production. The commitment of time to client matters as well as the valuable commitment of non-chargeable time in areas such a business development and marketing, management, training, etc.
  2. Billings and Collections.
  3. Business generation from new and existing clients.
  4. Business development and marketing. This includes being active outside the firm in pursuing opportunities to attract business and enhance the firm's reputation.
  5. Leverage. This includes delegating work to others and supervising that work.
  6. Profitable work. Partners should have an obligation to pay attention to the relative profitability of the types of work being handled.
  7. Training and supervision of others in the handling of client matters.
  8. Firm management and office/practice management.

Compensation Enhancement Tips

As a management consultant to law firms, it is my belief that the key in designing any compensation system is to develop an understanding of the firm's vision and direction.

A well-designed compensation plan becomes one of many tools a firm can use to help reach its strategic goals. There are a number of other variables that partners should consider before “tweaking” their firm's compensation system. This will require the firm to move forward cautiously when considering many of these variables. There may be long-term and/or short-term consequences associated with incorporating any “tweaks.”

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