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How Is The Pie Cut?

In January law firm partnerships all over the country assign and distribute profits. Well-run firms have an understanding of how their pie is cut and what is valued within the firm. Still, it is a rare firm where someone does not feel misjudged and inappropriately compensated.

Partners who feel unfairly compensated sometimes complain, or leave. However, since most partners do not leave over a year’s compensation disappointment, I want to suggest a few things to think about, and perhaps change, if you find yourself in this situation. (You can leave in a year or two if things don’t improve.)

People who rationally feel disappointed regarding compensation come from fundamentally two perspectives. Some believe they deserve a certain amount of money or percentage of profits, and are put off if they do not get that number. Others may have achieved their expectation, but perceive that someone else who contributed no more to the enterprise made noticeably more. They are disappointed not with their compensation, but with their firm’s hierarchy.

Which category you are in? If you resent someone else’s compensation, perhaps firm life is unfair: you cannot become the child of the founding partner or the cousin of a big client, and if such things are rewarded beyond your tolerance, you may choose to leave. However, perhaps the other partner did contribute to the firm in ways you do not value, but should. Did that person train associates or paralegals, investigate new technology or manage internal CLE programs? Such things may not be something you like as a distinction, but they do improve everyone’s lives.

Perhaps the firm’s assessment of your worth is more correct than your own. Frequently relative compensation can be changed in the future not by complaining but by understanding what goes into these decisions and acting accordingly over time.

This entry was posted in Equity Partners, Law Firm Profits, Partner Compensation, Rainmaking and tagged , , , . Bookmark the permalink.

One Response to How Is The Pie Cut?

  1. Good points K.C. One of the challenging aspects of partnership is comparing our financial rewards to others. Is it fair? Will we let it impact how we interact with those who we think got too large a slice? I think your last bit of advice is key: starting an open-ended conversation vs. whining is definitely the way to go.

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