Hard as I Try, I Can't Make this Square Peg fit in this Round Hole

In a 2001 edition of Edge International, Michael J. Anderson published an article titled Partner Compensation Systems in Professional Service Firms.

Stephen Mabey Author

In the article, he identified seven basic plans which were then utilized as the basis for most professional services firms' partner compensation systems, subject obviously to some tweaks by firms. The plans identified were:

  • Equal partnership
  • Lock-step
  • Modified Hale and Dorr
  • Simple unit formula
  • 50 / 50 Subjective / Objective
  • Team-building
  • Eat-what-you-kill

Firms leaning towards more subjective interpretation of partners compensation trend towards lock-step and equal partnership and those leaning towards more objective interpretation trend towards 50 / 50 subjective / objective and eat-what-you-kill systems.

Obviously there are strengths and weaknesses to all of these systems and there is no best one per se as there is no magical system that will satisfy all partners, support all strategic goals and never need to be changed. One of the many pitfalls of law firm management is forgetting about the last part — the need to change and adapt compensation systems to both internal and external changes.

That is not to say that firms don't occasionally tweak their systems in response to pressures mounted by specific interest groups but few adapt them to the real change that they are experiencing inside and outside their firms. After all, isn't success in law firm compensation defined as minimizing the degree of unhappiness everyone has with their current remuneration?
At the same time most folks involved in law firm management generally accept the premise that what gets compensated gets done and what isn't, doesn't!

There are many challenges facing the private practice of law including the level of investment required in intelligent technology; the need for greater collaboration in the actual practice of law (yes it is becoming a team sport not to say there are not some gunslingers left); succession planning at the client, lawyer, management and staff levels; and skill transfer.

Yet many, if not most, law firms continue to speak or send messages on desired behaviour to address these challenges but fund something entirely different.. While altruism is not dead in the legal profession it is certainly seriously ill. There are more reasons than I can enumerate but likely include:


The rest of this article is available in Stephen Mabey's new Book

Book Cover - Leading and Managing a Sustainable Law Firm - Tactics & Strategies for a Rapidly Changing Profession by Stephen Mabey

Available for purchase on BookBaby.

 

 

 

 

 

 

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