Best Practice #1: Improving transparency

The path to becoming a billing partner is varied, with inconsistencies, and there is no official guidance as to how one becomes a billing partner. Sometimes it is just who gets the file open first; sometimes it is the partner with the most political clout. . . . [read more]

Best Practice #2: Benchmarking

The system is effectively feudal. Compensation is centralized with a very small group of partners. Because voting is weighted, the firm chair knows exactly how many votes he needs to control the firm and he pays the top tier enough to buy their loyalty. . . . [read more]

Best Practice #3: Improving Diversity on compensation committees and introducing other checks on bias and in-group favoritism

In our respondents’ firms, the committees in charge of compensation were remarkably white, and remarkably male. This creates the perfect conditions for in-group favoritism that systematically disadvantages women, and people of color of both sexes. . . . [read more]

Best Practice #4: Re-examining the billable hours threshold

Billable hours inevitably play a significant role in the level of partner compensation. Yet two different models exist for taking billable hours into account. One requires all partners to meet a certain billable-hours threshold in order to receive all the credit available for the billable-hours component of attorney compensation, on the theory that billable hours are only one type of contribution partners need to make for firms to flourish. . . . [read more]

Best Practice #5: Re-designing origination credit

Sixty percent of firms in the survey do not formally award origination credit. Yet even in firms without formal origination credit, origination often plays a central role in the setting of law firm compensation. . . . [read more]

Best Practice #6: Ensuring a diverse committee handles disputes over reward allocation, particularly origination credit

Not only the system of reward allocation, but also the process for settling disputes, can make a tremendous difference for women and people of color. This study shows clearly that the current system, in which origination credit contests are left to be negotiated privately between the contesting partners is having a highly negative effect on many women and attorneys of color. . . . [read more]

Best Practice #7: Taking pro-active steps to check the hidden bias that will otherwise surely emerge in the context of compensation systems

The first step is to look very carefully at law firm compensation systems that are totally subjective. While these may work well in some small firms, they present very serious risks of gender and racial bias. . . . [read more]

Best Practice #8: Developing a process that does not penalize women for self-advocacy

In firms with effective performance evaluation training, partners will soon learn that penalizing women for self-promotion that is seen as unobjectionable by men is gender bias. Firms that fail to do so, at the very least need to make partners aware that their instincts may be to find distasteful in women, the kind of self-promotion they take for granted in men. . . . [read more]

Best Practice #9: Conforming to standard business practice by linking compensation to individuals’ contributions to the long-term viability of the firm

An important point, rarely mentioned, is the current system’s odd focus on current cash flow. To state the obvious, cash flow differs from the bottom line, which is a measure of the difference between revenue flow and expenses. Consultants sometimes circle around this, as when they note that partners in practice areas with higher profit margins should be rewarded financially. . . . [read more]

Best Practice #10: Designing compensation system that does not penalize part-time partners

In some cities, the number of women partners who are working as part-time partners is fast approaching 20%. And although the numbers remain small, the number of partners working part time has almost tripled in the last 15 years. . . . [read more]