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For a variety of reasons, many busy lawyers do not have a thorough understanding of their firm\u2019s compensation system. \u00a0Maybe a new partner orientation meeting was missed or a private session on the topic was never rescheduled. Maybe you formerly understood the system, but over time the system was tweaked (see above re consultants and management time devotion) and the memo(s) on the changes arrived during a trial or in the middle of a major deal.\u00a0 In all events, you are not going to be able to flourish, lead and mentor without understanding your firm\u2019s system.<\/p>\n
The first step in educating yourself is to take advantage of the learning your firm provides \u2013 there are often new partner retreats and trainings, as well as memoranda describing the model and what the firm believes it is incentivizing by its model. If you haven\u2019t the opportunity for these, meet with a member of your firm\u2019s appropriate committee, your CFO, or even your managing partner and get a tutorial. You are not going to be able to flourish, lead, and mentor without this information \u2013 this is true whether you came up through the ranks or lateraled in.<\/p>\n
In general, originations are the dominate force shaping partners\u2019 compensation.\u00a0 Billing rates play a secondary role, showing up in a partner\u2019s personal working attorney receipts.\u00a0 In MLA\u2019s recent 2024 Partner Compensation Survey<\/a>, those two variables explained 72% of compensation differences.\u00a0 Additional factors your firm may use might include credit for leading matters, pro bono, firm management, and citizenship.<\/p>\n You want to appreciate how your firm\u2019s system values your practice and the practice you intend to grow as your career progresses.<\/p>\n As every newly promoted partner (and their spouse or significant other) quickly learns, partner compensation is crazy complicated and not ratable over 12 months. \u00a0Beyond the timing of dollars which varies dramatically from firm to firm, there are benefits and retirement packages some or all of which may be self-funded. Capital contributions likely need to be made at various points of time. \u00a0If you don\u2019t have a complete picture of what your total \u201cannual\u201d compensation is and when you should expect it to be paid, you will be unable to evaluate whether you are being paid \u201cfairly\u201d at your current firm or whether another firm\u2019s offer is more lucrative.\u00a0 Your accounting department is a good place to ask for a 12-18 month pro forma.<\/p>\n You\u2019ve interviewed, painstakingly filled out the LPQ, and are presented with an offer by a firm you are excited to join. Now you need to carefully and thoughtfully understand and appreciate the offer. \u00a0Candidates are often initially underwhelmed or overwhelmed by offers and want to immediately decline or accept.\u00a0 Don\u2019t be that candidate; instead:<\/p>\n In sum, do the same due diligence you would recommend to a client when it comes to understanding your current and prospective compensation.\u00a0 It is time well spent in furtherance of your career and your family\u2019s wellbeing.<\/p>\n The post Near and Dear \u2013 Understanding Your Partner Compensation<\/a> appeared first on Attorney at Law Magazine<\/a>.<\/p>\nUnderstand Your Current Compensation<\/strong><\/h2>\n
For Those Evaluating a Move, Understand the New Firm\u2019s System & Your Compensation Offer<\/strong><\/h2>\n
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