Best Practice Tips: Law Firm Non-Equity Partner Subjective Compensation Factors

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our firm is a 17-attorney commercial litigation firm in Atlanta, Georgia. I am a member of our firm’s management committee that decides raises and bonuses for non-equity partners and associates. Currently our non-equity partners are paid a salary and a discretionary bonus. We would like to stay with this approach; however, we have had complaints that our system is totally arbitrary. We would like to be able to provide more transparency— a general list of the items that we consider when making our decisions on salary and bonuses. Your thoughts would be appreciated.

A. Here is a suggested list of factors with weights that you might want to consider:

• Fee Production: Client Origination Collections—25 percent weight
• Fee Production: Working Attorney Collections (billable hours in some firms)—25 percent weight
• Profitability of Work—10 percent weight 
• Delegation of Work—10 percent weight 
• Client and Case Management—5 percent weight
• Technical and Professional Competence—5 percent weight
• Professional Conduct—5 percent weight
• Firm Management and Leadership—15 percent weight

You can adjust this list for your particular situation and based on what is important for your firm.

Here is a sample list of subjective compensation factors with detailed consideration factors with weights and points.

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John W. Olmstead, MBA, Ph.D, CMC, (www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics and author of The Lawyers Guide to Succession Planning published by the ABA. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.