Law Firm Compensation That Rewards Collaboration

There are at least two good reasons to encourage collaboration among law firm lawyers: It increases the total amount of business coming to the firm and it makes it less likely that the departure of any one or several lawyers will result in the wholesale loss of a client. Whether a firm is able to get this kind of collaboration is largely dependent on how it handles compensation. Most firms no longer base compensation on seniority and instead use some kind of performance-based metric, but under that general heading some formulas work better than others, and some may be counter-productive. Lawyer and consultant Jim Pagliaro identifies “the right levers” to encourage partners to “open up their relationships and view their clients as clients of the firm, rather than individual possessions.”