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. We have partners who are named as billing partners for clients who never do any billable work for those clients....There is no consistency and no one to turn to for guidance; there are no rules. Yet this is [important] to the overall determination of partner compensation.
A system that is not clearly and formally explained to everyone means that, to gain the knowledge necessary to understand the system, one needs to rely on informal networks and relationships with people in power. This situation will disadvantage out-groups, which in most law firms means that it will disadvantage disproportionate numbers of women and people of color. Informal, opaque systems also will disadvantage many white men who are too shy or introverted to know the right people, and the ropes.
A best practice is to write a memo that explains clearly how a firm’s compensation system works, and provides for each new partner an introductory session with an existing partner-mentor to explain the system and to answer questions. Of course, the partner-mentor needs to be someone who actually understands the compensation system: as our survey indicates, many partners do not.
When the compensation system is changed, this needs to be clearly explained. This probably will be best handled in small meetings: in large meetings, people will be reluctant to ask questions, whereas one-on-one meetings are likely to yield inconsistency in the information given.
A more basic point is that firms need to understand what factors actually play a major role in a firm’s compensation—to talk about realities rather than aspirations. Gaining this information often will require a statistical analysis, to identify what factors are actually influencing compensation, as opposed to what factors are announced to have an influence. This kind of statistical analysis typically will require an outside consultant—but this is a type of analysis familiar to consultants who specialize in compensation systems.
A final point is that firms need to understand whether those factors that play an important role in elevation to partnership are different from those factors that play an important role in the setting of partner compensation. If different factors have a major influence on the setting of partner compensation than on the elevation to partnership, firms need to inform new partners of this fact. Again, making this kind of information process more formal can avoid in-group favoritism—where “those in the know” succeed, while those who are not in the know tend to fail. Allowing in-group favoritism to flourish will disadvantage not only women, but also people of color, lesbian and gay lawyers, and perhaps others.
