Learn about the top two ways law firm partners are compensated in this article.

The topic of partner compensation is difficult and controversial. The reason is because while in theory law firms are groups of equals at the partner level, when certain partners are paid more than others questions inevitably arise as to why those partners are valued more highly and whether they actually make greater contributions to their firms. Law firm compensation system architects must continually ask: How can we most accurately and fairly quantify “contribution” to the firm?

In this article we explain the various partner compensation systems in use by law firms during the past 15 years. We also discuss ways in which some partners would like to see their compensation systems change as well as a possible new trend towards integrating a profitability metric into compensation systems.