Cotterman on Compensation
This blawg discusses all levels of law firm lawyer compensation, from associates to service partners, to rainmakers, to lawyer-managers, and senior lawyers who are phasing down in preparation for retirement. It comments on external market forces as well as the complex internal issues of system design, productivity, and motivation. It draws on Altman Weil’s extensive survey databases as a source of compensation trends and benchmarks.
Author: Jim Cotterman is a principal with Altman Weil, Inc., based in Newtown Square, Pa. He is the lead author of ABA’s Compensation Plans for Law Firms. He is a member of the board of editors of American Lawyer Media’s newsletter Accounting and Financial Planning for Law Firms. Another Altman Weil principal, Charles A. "Biff" Maddock, authors Maddock on Marketing.
Blawg Related Categories: Careers • Lawyer Pay • Law Firms • Associates • Partners • Consultant
Recent Posts from Cotterman on Compensation
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Mandatory Retirement — Ongoing Discussion
Premise: You are on the Executive Committee of a large law firm with a mandatory decompression and retirement provision and the authority to grant waivers (although that authority has never been used). A senior partner…
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More on Non-Equity Partner Tiers
I mentioned in my last post that creating a non-equity tier as a place to put your under-performers is a bad use of a tiered structure. Other similarly weak reasons to create a tiered structure…
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Difficult Decisions in Down Cycles
It is interesting to observe how law firms cycle in tune to the economy. In robust years, law firms are apt to be more generous in both promotions and pay increases. The sentiments behind those actions…
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World Beaters
This was the title of an interesting piece on The Lawyer.com (2/18/08). It speaks of the the possible emergence of a global elite — two firms who have surpassed the $2 billion dollar annual revenue…
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How Much Debt?
We are often asked how much debt a law firm should carry. The precise answer varies based on the collective financial leverage tolerance of the partners and the capital needs of the firm. However, here are…
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Compensation for the New Partner
The variables for setting compensation of a newly promoted partner can be a challenge to get right for all concerned. Let’s look at an example. Last year as an associate Sally’s total compensation consisted of…
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What is a Bonus?
Some firms consider a bonus any payment in addition to base pay. So a distribution beyond draw/salary made in accordance with a defined allocation is a bonus. No attempt is made to distinguish performance from…
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Compensation System Selection
The success or failure of any compensation system is not simply inherent within the structure of the program. Compensation is just one element of how law firms operate. What we tend to forget is the…
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Balance Sheet Metrics
Tis the season for getting the fiscal house in order. Many firms push on getting bills out in November and then make an even greater push for getting paid in December. Balance sheets tend to…
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Partners Contribute Hidden Capital
Law firm partner compensation is comprised of pay, profit and reinvested capital. Few law firms distinguish between the three and it may be fair to say few partners even think of their compensation in this…