Well-Developed Compensation Policies and Pay-Plans for Lawyers

How to slice up the compensation pie has long been a problem for many law firms. The first question you may ask yourself is whether you have a well-developed compensation plan for your firm. After the announcement by Big Law that entry-level associates would start at over $200,000 per year (AbovetheLaw.com), competition for talent has become even more fierce. So, what do small to mid-size firms do about recruitment and compensation? How do they compete?

The beginning of the year is a time for reflection on collections, associate compensation, and bonus pool allocations. It is also a good time to remind yourself of some basic considerations about compensation:

  • Attorneys work for many complex reasons. Compensation is an important factor, but not the only consideration. The relative importance of compensation and other factors in job contentment vary with the individual and the circumstances.
  • Attorneys work to: have a purpose in life, aid their clients, out of pride in their profession or their firm, for camaraderie and for approval of their peers, their partners, and relatives. Attorneys work for money as well. The burning question across the profession is: how much is enough? The answer: it depends.
  • Every firm has its own set of revenue issues, personalities, and enduring culture. There is no one-size-fits-all system.

The current compensation market is extremely competitive which limits the control for many firms. There are so many factors to consider when establishing your compensation systems. At the end of the day, ask yourself: is your current system fair? And more importantly, is it perceived to be fair by others? The attorneys may not like the results of the system in any given year, but as long as they perceive it to be fair, you have won most of the battle!

B2 has a team of consultants that work with firms on compensation plans. Let us help you build the foundation.

Published On: January 11th, 2022 / Categories: B2 News Tips /