Perhaps nothing is more sensitive, and more talked about in law firms, than partner compensation. In a landscape of mergers, poaching of laterals, and both high and low-performing partners, management teams have to address this potential landmine to retain talent, maintain trust and advance strategy. Going to experienced consultants helps management to get neutral advice, a range of options and improved processes in compensation schemes.
In the past few years Edge has often been asked how a firm should reward the “subjective” contributions to a firm’s overall success. We prefer to call these the “qualitative contributions” of partners. We have written and extensively advised on this topic. See the following for more insights:
- Partner Performance and Compensation
- Equity Points for Top Performers
- Compensation Factors and the 3-point shot
- Navigating the Compensation Maze
Edge handles compensation engagements large and small, from “tweaks” to reward the best performers to more extensive overhauls that balance financial performance with other key contributions. We are able to:
- review and understand your current system in the context of many others we have worked with;
- survey and interview partners confidentially in order to assess the merits and shortcomings they perceive;
- work with a compensation committee or executive group to review partner performance over several years and model how partners might fare in a revised system;
- narrow down the many options we will offer, in order to “make the case” for a few options that the committee will present to the partnership;
- examine and improve your process for annual compensation setting.
- as neutrals, present your compensation options and answer questions from the partnership, thus removing the committee from sponsorship of a particular option
(See Case study – Brazilian firm)
- In less extensive engagements, we are often called upon to present current options and the pros/cons of each to a retreat. We’re also asked to evaluate current systems. In both cases, the firm is better educated on how to proceed.