For many law firms, the month of June marks the halfway point in the firm’s fiscal year, a time when leaders begin to more closely assess year-to-date lawyer performance trends, refine year-end financial projections, and evaluate the the need for mid-year partner performance messages. Of course, this June is unlike years past. This June, we face a tremendous amount of uncertainty in the broader economy and also within the legal industry.
Law firm leaders are currently focused on business resilience measures – making the business decisions that will help the firm get through the trough of the pandemic and the resulting impact on the economy, as well as initiating planning for a safe return to the office environment. While these immediate issues are critical and pressing, leaders would be well served to start thinking now about the medium- and longer-term impact that the current situation will have on the legal industry and on their firms.
Not all revenue dollars are created equal. So, how should firms balance the important role of profitability with the challenges it can create in order to incentivize and encourage partners to pursue more profitable work or to manage the work more effectively?
Law firms must seek out more rigorous tools to measure and evaluate each partner’s qualitative contributions.
While many firms have fine-tuned their partner compensation systems over time, compensation remains an evergreen topic within partnerships, and one does not have to look hard to find ways to further improve a system.