find the latest legal job
Corporate/Commercial Lawyers (2-5 years PAE)
Category: Corporate and Commercial Law | Location: Adelaide SA 5000
· Specialist commercial law firm · Long-term career progression
View details
Graduate Lawyer / Up to 1.5 yr PAE Lawyer
Category: Personal Injury Law | Location: Brisbane CBD & Inner Suburbs Brisbane QLD
· Mentoring Opportunity in Regional QLD · Personal Injury Law
View details
Corporate and Commercial Partner
Category: Corporate and Commercial Law | Location: Adelaide SA 5000
· Full time · Join a leading Adelaide commercial law firm
View details
In-house Legal Counsel & Commercial Lawyers
Category: Corporate and Commercial Law | Location: All Sydney NSW
· Providing lawyers with flexibility and control over when they work, how they work and who they work for.
View details
In-house Legal Counsel & Commercial Lawyers
Category: Corporate and Commercial Law | Location: All Melbourne VIC
· Providing lawyers with flexibility and control over when they work, how they work and who they work for.
View details
Partner remuneration systems are “stupid”

Partner remuneration systems are “stupid”

A legal consultant has slammed traditional partner remuneration systems and urged reform in this area.

Peter Ross, a former partner turned consultant, described the mechanisms for calculating partner remuneration at law firms as “stupid” at a conference hosted by software company Aderant this week (24 July).

He warned, however, that changing old habits would not be an easy to sell to partners.

“Lawyers, in a financial sense, are very simple people,” he said, wryly.

To underline his point, Ross quoted a CFO from a large law firm who refused to consider a new remuneration system. The CFO said:  “You’re 100 per cent right and we’re 100 per cent not going to do it”.

Ross argued that established practises at law firms, such as remunerating partners equally or dividing profits on the basis of one or two simple metrics, do not reflect a partner’s true performance.

They ignore, for example, the role partners play as trusted advisors, business developers, mentors and business unit managers.

Ross added that there is a way of dividing profits to reward these attributes.

However, as one of the audience members pointed out, partners do not take kindly to money being taken out of their pockets, regardless of the reason. Redistributing funds based on performance measures could be a cause for considerable animosity among partners.

This is why a robust justification for new measurements is needed, said Ross; if measurements of performance are recognised as fair and thorough by members of the firm, then linking them to remuneration will become more widely accepted.

Ross highlighted three ingredients needed to convince partners to adopt a new model: good communication; the use of visual displays in explaining new remuneration models, and boiling down all the metrics into one raw number for simplicity.

Demonstrating his acute awareness of the lawyer mindset, Ross cautioned that any new measurements of performance would need to be watertight as “lawyers are trained to look for weaknesses in models and exploit them”.

What to measure

Data for measuring performance is already available, according to Ross. It is up to firms to harness this information to calculate remuneration.

Ross listed statistics concerning partner profit, responsible fee arrangements, staff turnover, non-billable marketing time, matter satisfaction and compliance to firm policy as information that can be drawn on to build a new  pay structure.

Ross also spoke at some length on the importance of rewarding good marketing strategies in law firms.

He said that firms already know marketing skills and technical finesse do not always appear in the same lawyer. This, he joked, might explain why firms stop their best salesman from diving into the detail and avoid allowing exceptional but antisocial technicians loose at cocktail parties.

However, this separation of talent is not currently represented in payment models, he added.


Like this story? Read more:

QLS condemns actions of disgraced lawyer as ‘stain on the profession’

NSW proposes big justice reforms to target risk of reoffending

The legal budget breakdown 2017

Partner remuneration systems are “stupid”
lawyersweekly logo
Promoted content
Recommended by Spike Native Network
more from lawyers weekly
Jackie Rhodes
Dec 12 2017
Report sheds light on LGBTQI inclusion in law firms
A recent report has revealed the varying perceptions on LGBTQI diversity and inclusion in the Austra...
Women in business
Dec 12 2017
Annabel Crabb headlines Women in Business Forum
Political journalist Annabel Crabb has appeared at the Coleman Greig Lawyers Women in Business Forum...
Dec 11 2017
Warm welcome for new district court judges
Three practitioners who were appointed as district court judges in WA have been congratulated by ...
Allens managing partner Richard Spurio, image courtesy Allens' website
Jun 21 2017
Promo season at Allens
A group of lawyers at Allens have received promotions across its PNG and Australian offices. ...
May 11 2017
Partner exits for in-house role
A Victorian lawyer has left the partnership of a national firm to start a new gig with state governm...
Esteban Gomez
May 11 2017
National firm recruits ‘major asset’
A national law firm has announced it has appointed a new corporate partner who brings over 15 years'...
Nicole Rich
May 16 2017
Access to justice for young transgender Australians
Reform is looming for the process that young transgender Australians and their families must current...
Geoff Roberson
May 11 2017
The lighter side of the law: when law and comedy collide
On the face of it, there doesn’t seem to be much that is amusing about the law, writes Geoff Rober...
May 10 2017
Advocate’s immunity – without fear or without favour but not both
On 29 March 2017, the High Court handed down its decision in David Kendirjian v Eugene Lepore & ...