Wednesday, January 05, 2011


Resolve to Change the Partner Comp Process this Year

Last summer, PAR and MCCA published the groundbreaking study on the disparate impact of law firm compensation systems on women. The study concluded that existing compensation systems for lawyers open the door to gender bias because they contain tremendous subjectivity, lack transparency, and because so much of the negotiation surrounding salaries takes place out of sight.

As many firms are in the partner compensation process, we wanted to provide the best practice recommendations to address the problems identified in the study:

1. Make the process transparent
2. Benchmark to check the demographics of compensation levels
3. Improve diversity on the compensation committee and consider implementing a reviewing partner system
4. Have a billable hours threshold with no compensation for billing over
5. Origination credit should not be inheritable; pitch credit as an alternative
6. Set up a diverse committee that handles disputes over origination credit
7. Tie compensation to institutional investments as well as cash flow
8. Process should provide a check on bias

PAR would like to hear about changes that firms are making as a result of the study or which highlight best practices. Over the next year, we are collecting best practices from law firms to prepare follow up findings on the study, which we will share at our annual conference in Spring 2012. We will also highlight achievements here. Contact us with any questions or success stories.

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