Sep 13, 2017
Duration:11:33
Law firms are working hard at the difficult task of tailoring their compensation models to retain key talent, attract new talent, send the right message for what is valued at the firm and protect the firm’s culture all at the same time. It’s not easy and there is a lot of experimenting going on.
The American Lawyer sat down with David Barnard of consulting firm Blaqwell Inc. for a discussion on what is driving firms to change compensation models, how they are doing it and what that means for their partners.
Firms are more focused than ever on paying partners who provide the greatest value, Barnard says, and that is no longer defined as origination prowess.
“Value is distinctiveness,” Barnard says. It’s a suite of services the clients need and are willing to pay for.
Profitability (not profits per partner) has become the key metric in measuring value, Barnard says, but that has proved challenging for firms where lawyers long for the time when revenue was the main driver.
As firms tinker with their compensation system, merit is far outpacing seniority in terms of value and bonuses are playing a growing role. Rising stars face a lot of opportunity for very significant pay raises while “run-of-the-mill” partners who are doing just fine will rise more slowly, Barnard says.
So what advice would Barnard offer firms? Decide what you want
and pay for it.
“Compensation should always support strategy, not drive strategy,”
Barnard says.