It appears that law firms are modifying partner compensation measures in response to escalating market pressures. Noteworthy developments include the steps taken by several law firms to acknowledge nontraditional compensation aspects such as collaboration. Nonetheless, the basic mechanisms driving monetary remuneration have largely remained static since they were first conceptualized. This involves tweaking partner compensation and rewarding collaboration actions that seem to challenge the long-standing practices.
Many compensation plans still operative today were devised as far back as the 1980s, a period when law firms faced less competition, handled more regional work, and had to contend with fewer Legal Process Outsourcing (LPO) providers and other supplementary businesses. As Tim Corcoran, a consultant at Corcoran Consulting Group observed, such outdated plans frequently fail to reflect what law firms require from their partners in today’s fast-paced and competitive legal environment.
There are indications that without suitable rewards and incentives closely linked to leadership goals, law firms may risk narrowing down their potential list of leadership candidates. Therefore, it calls for an industry-wide reevaluation of existing compensation configurations and developing more aligned systems fitting the challenges and expectations of today’s legal firms and their future leaders. A longer discussion of this issue can be found at Law.com.