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Worldview Archives
Is your compensation system being stress-tested in 2023?
As the legal services world has emerged from the disruptions of the COVID-19 pandemic, we continue to observe an unusually high degree of "churn" in associate and partner movements in legal markets worldwide.
In most instances, compensation has been a significant factor in these departures, although not the only one. Remote working during the pandemic opened new opportunities for discrete lateral recruiting, with the "losing" law firm not finding out about someone's decision to leave until it is too late.
Three Things to Think About Now as You Think About the Future
Law firm leaders and planners — indeed, all lawyers — are right to be concerned about the future of the legal profession. We can expect significant changes, powered by increasingly sophisticated client expectations and the more powerful service delivery capabilities of advanced technology, to redefine what a "law firm" will look like and how it will operate in the 2020s...
...which are only a few months away.
“Black Box” or “Black Hole”
Some law firms use "black box" systems for partner compensation because they want to avoid internal disputes among partners.
A former partner’s case against a major U.S. law firm points out how these systems often can make things worse.
Partner Compensation and Individual Partner Profitability
Even the most effective partner compensation systems sometimes have difficulty basing a partner's remuneration on the profitability of each partner’s practice.
This is because they try to take too simplistic an approach to a complex and highly individual concept.
“Eating” Without “Killing” Each Other: A Performance-Driven Lockstep Model for Lawyer Compensation in Law Firms
In a previous posting in this blog, we pointed out how an “eat what you kill” system of partner compensation can introduce toxic elements into a law firm, which frequently counteract any motivating effect on lawyer performance.
This short article outlines the features of an alternative to "eat what you kill" compensation in law firms. It works well in any size law firm, but is especially suited to small and midsize firms.
“Salary Plus” Compensation Structures to Promote Better Partner Performance in Law Firms
In a previous posting in this blog, we pointed out how an "eat what you kill" system of partner compensation can introduce toxic elements into a law firm, which frequently counteract any motivating effect on lawyer performance.
This short article outlines the features of an alternative to "eat what you kill" compensation in law firms. It can work well in any size law firm, but is especially suited to small and midsize firms.
Is “eat what you kill” killing your law firm?
An "eat what you kill" system of partner compensation does have some good points for some law firms.
For most law firms, however, "eat what you kill" can kill the partnership.
This is the second most frequently read post in the Worldview Archives, with more than 22,000 views since it was first published in 2018.
Partner Compensation: a Small Law Firm’s Biggest Risk?
Smaller law firms have much less tolerance for poor management. The loss of just a few clients or even one partner can have a disproportionately larger impact than in a larger firm.
One of the biggest risks to a small law firm — and one that is frequently overlooked or, in some partnerships, deliberately ignored — is its partner compensation system.
Why Small and Midsize Law Firms are Especially Vulnerable to Mental Health Issues
What would you do if you suspected that one of your colleagues was chronically depressed or was abusing alcohol or drugs?
Unfortunately, most small and midsize law firms can't answer this question.
Some don't even want to think about it.
Setting Goals That Are Worth the Effort
Success starts when you have a goal?
Not necessarily.
Success is likely only when firms make the choices that are right for them.
Leadership in Times of Change
Law firm leaders tell us “We now have to accept change as the status quo."
And this means making judgment calls when there is insufficient time to find perfect solutions, or even to get all of the partners to agree.
You have decided to change your partner compensation system. What’s the next step?
It sometimes seems as if there is an almost infinite range of structures and options for partner compensation systems in law firms. Choosing among them can be a challenge for anyone.
The biggest challenge for most law firms, however, is actually making the change, once they have decided what it will be.
When a Lateral Partner Candidate is at Your Door
The melodramatic title and image for this posting might overstate the point, but it is one that small and midsize law firms frequently overlook when recruiting a partner from another law firm.
Don't make decisions about how to navigate through this very important decision based only on what you believe that you see.
Are law firm “partners” obsolete?
In the past few weeks, I have enjoyed stimulating discussions with several Walker Clark clients about whether their law firms should have non-equity partners.
This subject leads to one basic question that has profound implications for many law firms today:
Should we have partners at all?
Confronting Cultural Realities
"Why don't we get the results we expect?"
This is a common frustration of many law firm partners and managers. One way partners can dramatically increase the likelihood of achieving satisfactory results is to incorporate cultural due diligence into their decisions and the execution of their strategic priorities and goals.
Practicing Law in the Dark
Do you really know how profitable your practice is?
Do you know which factors are most important to your profitability?
For a surprising percentage of lawyers and law firms, the honest answer to each of these questions is "not really." They are practicing law in the dark.
It is not surprising that they frequently stumble over obstacles and fall into holes that other law firms easily avoid.
Silence is not always golden.
Law firms with poor internal communications skills and practices face great obstacles when they try to implement any decision, even minor ones.
One of the most important tools in a firm's internal "communications tool kit" is to schedule time for talking.
This is the first in a series of short posts about questions that I frequently receive about the importance of internal communications to "getting things done" in law firms.
Is your partner compensation system a strategic liability?
The legal press this week gave us two interesting examples of how partner compensation systems, and the cultural assumptions and values that they represent, can thwart the efforts of excellent law firms to achieve their strategic objectives.
Is your law firm's partner compensation an asset in your efforts to achieve sustainable business success, or is it an obstacle?
Are you a law firm or a condominium?
This is an important question, especially for small and midsize law firms that want to have a future.
Many smaller law firms are firms in name only. The partners share a common brand, office space, and expenses, but almost nothing else.
When is enough, enough?
Making a decision to leave your law firm partnership is likely to be the hardest career decision you will ever make.
How do you know when the timing is right, for you and for the firm?
