Compensation

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The article “Pay Gap Widens at Big Law Firms as Partners Chase Star Attorneys,” published in The Wall Street Journal last week, reported on the increasing spread in partner compensation at large law firms, setting many in the industry talking.  In fact, the article understates the extent of the spread, the factors driving it and the impact that spread is having on both the firms in question and throughout the industry.

As discussed in my CCM audio conference on partnership compensation trends last month, the spread 10 years ago at most firms was 3 or 4 to 1, with partners moving up the pay scale based either on performance or tenure or some combination of the two.  That spread has grown in the last few years to over 20/1 at some firms, more than twice what the WSJ cites, which obviously didn’t find any firms with record spreads willing to fess up publicly.  Unfortunately, many times, thanks to lack of transparency, the partners themselves don’t realize the extent of the spread and therefore aren’t able to tattle. 

Why the increase?Continue Reading Large Firm Spread

After literally years of bad news, recent reports have sparked a flurry of hope for an uptick in demand for legal services in 2011.  Let’s look at the data for some indication of whether that optimism is justified. 

According to the Citi Private Bank report issued for the first 3 quarters of 2010, while demand in 2009…

One of the more interesting topics that we covered at this week’s audio conference for CCM on Partner Compensation systems are the trends occurring in the types of systems being used–globally, in the US in response to the current market pressures and in the course of an individual firm’s development.

The data on global developments is not well updated. …

Muir and Norman Clark of Walker Clark will be co-presenting a Center for Competitive Management audio presentation on Thursday, January 27, 2011 at 2pm EST entitled "Partner Compensation–Defining the New Normal."  The presentation will cover:

  • Key trends in partner compensation for 2011
  • Common and uncommon compensation plan options
  • Who should evaluate performance and pay?
  • Ways

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In the wake of all the steps taken over the past few years to cut expenses, expectations might be that partner compensation might be stable or even going up again anytime soon. 

So let’s be very clear about what may have gotten lost in the webinar discussion last month on partner compensation: after marching up conservatively but reliably for decades and…

The most interesting question, in my opinion, that was asked of me and Peter Zeugheuser at last Thursday’s CCM audio conference on Origination Credit and Partner Compensation for the New Legal Landscape was not really within the purview of the topic.  It was "does compensation really work as an incentive?"  

The topic–for a broadly diverse audience–was an overview of law…

Muir will co-present with Peter Zeughauser an audio conference hosted by Center for Competitive Management (CCM) on Thursday September 30, 2010 from 2:00 pm to 3:15 EST.  "Origination Credit and Partner Compensation for the New Legal Landscape" will include discussions of what origination is and how to measure it, what role origination plays in changing compensation systems, the impact of the…

Back when we were all focused on raising our retention rate of associates, I also waved the flag about the poor retention rate we have with the lateral partners we hire–a musical chair game that has been in full swing for a number of years and seems to have survived or at least is being revived after…

David Brooks’ editorial in the Friday, July 23rd New York Times was on morality, in particular the type which naturalists view as another outcome of evolution. The naturalist position is that, much as we have over time developed receptors for sweetness and saltiness, we have also developed receptors that recognize fairness and cruelty. 

At a…

In addition to the factors we pointed out as relevant in evaluating the Sotomayor Supreme Court nomination, recent studies provide some additional insight into the impact of minority judges just in time for consideration of Kagan’s SCOTUS nomination.

The ABA Judicial Division reported this spring on two studies conducted by the University of Pittsburgh…