Compensation

Articles

• Rethinking Partner Compensation Criteria 
  by Howard L. Mudrick
  

  In this article, Howard says you get what you pay for when it come to setting partner compensation. He encourages law firms to look beyond seniority and personal productivity. Too short-sighted, he says. Rather, they should find ways to measure and reward contributions to the firm's long-term success. These criteria might include client service, project management and firm leadership.

• Partner Compensation:
  Creating a Performance-Boosting Scorecard 
  by August J. Aquila
  

  In this terrific article, Aquila offers his guidance to build a "near-perfect" compensation system at your firm. He says your compensation system should strive to achieve nine important goals if you want to achieve long-term success

• Partner Compensation Systems:
  Systems Used in Professional Services Firms 
  by Michael J. Anderson
  

  This is one of the better articles we've read on law firm compensation systems. It succinctly reviews the pros and cons of seven basic systems, including lock-step, modified Hale and Dorr, and eat-what-you-kill. Importantly, Anderson says there is no perfect system that will satisfy all partners, that compensation must support firm strategic goals, and it's important to keep it simple, stupid.

• Administering Partner Compensation Systems
  by Joel A. Rose
  

  Partner compensation. It's invariably the "hot-button" issue whenever a group of managing partners gathers to talk shop and compare notes. This thoughtful article discusses ideas your firm might consider to build a more "unified" firm culture. When it comes to comp, there's more to it than formula.

• Associate Salary Figures in a Holding Pattern, NALP Survey Shows 
  by Karen Sloan, Law.com
  

  NALP (National Association of Legal Placement) released a report in September 2010 stating that starting salaries for first-year associates at large law firms have been stagnant in 2010. The median annual salary is about $115K for first-year associates across all firm sizes for both 2009 and 2010. That's down from $130K in 2008. 

• Firms' Billing Rates Inched Up During 2009 
  by Karen Sloan
  

  It's hard to believe but, even during the worst economic recession in over 70 years, US law firms managed to increase their billing rates in 2009. The average was 2.5% according to a recent survey of the nation's largest law firms conducted by The National Law Journal. That increase compares to a 7.7% rate climb in 2007 and 4.3% in 2008. The survey also indicates that a larger percentage of revenue for most firms was generated from alternative billing arrangements.   

• Associate Pay Cuts Here to Stay, Say Firms and Analysts 
  by Julie Triedman
  

  According to this article that originally appeard on AmericanLawyer.com in December, a growing number of law managing partners and consultants say that steep cuts in associate compensation are here to stay. "We do not see any movement to reinstate pre-recession pay levels," says Altman Weil consultant Jim Cotterman.  Starting salaries for first-year associates reached a staggering $160,000 a year at blue-chip firms in New York, Los Angeles and Washington.

• Trends in Partner Compensation
  by Jane Sender
  

  Compensation is a hot-button topic for almost every managing partner. It is also a critical driver behind the lateral movement of equity partners. This article by placement specialist Jane Sender provides an overview of recent trends in law firm compensation systems, including open vs. closed, and formula vs. subjective systems.       

• Setting Associate Compensation Sensibly: A Methodology
  by John Iezzi
  

  In this article, long-time consultant John Iezzi sets forth an interesting formula-driven, performance-based compensation scheme for associate attorneys. However, we think it's also important to include subjective factors, as well, to reward exceptional work product, positive attitude, firm citizenship, marketing and other non-billable, hard-to-quantify contributions.  

• It's Bonus Time! Rewarding Top Performers with Innovative Incentive Programs
  by Steven T. Taylor
  

  Compensation is always a touchy subject...especially in an off year like this one. This article features case studies of what a handful of innovative firms are doing to reward exceptional - often non-billable - contributions to firm goals and objectives.   

• Do Law Firm Compensation Systems Drive Profitability?
  by Edge International
  

  While there is certainly no such thing as the "right" compensation system, here's an interesting article from our friends at Edge Group concluding that formula-driven compensation systems hurt firm profitability.   

• Partner Compensation Systems in Professional Service Firms - Part 1
  by Michael J. Anderson
  

  This is the first of two articles Anderson has written on the topic. He asserts that, while there is no perfect system, a good compensation plan supports and aligns with the firm's strategic goals and objectives. Be sure to read Part Two of this article, as well. 

• Partner Compensation Systems in Professional Service Firms - Part 2
  by Michael J. Anderson
  

  This article, coupled with Part 1, is a great resource if your firm is considering changes to its compensation system. Warning: Proceed with caution! 

• Best Practices for Setting Managing Partner Pay
  by Peter A. Giuliani
  

  How should a firm appropriately compensate its managing partner for the non-billable time required of the role?  Take a look at Peter Giuliani's article that appeared recently in the ABA's Law Practice Magazine.

• Dealing with Tensions Surrounding Partner Compensation
  by Joel A. Rose
  

  This article presents a good overview of various compensation systems and poses the question "Is there an ultimate solution to setting a partner compensation formula?"