In the wake of Dewey & LeBoeuf’s collapse last year, Legal affiliate The American Lawyer published an article we had written about an issue that turned out to be a major contributing cause of that implosion: the wide compensation spreads within the equity partnership of large law firms. With the release earlier this year of regular Legal affiliate The Am Law Daily contributor Steven J. Harper’s book, The Lawyer Bubble, and a recent American Lawyer survey that detailed the compensation spreads at many large firms, the issue has gained even greater attention.
Let’s cut to the core of what’s potentially problematic about these widening spreads. Not only must a compensation system be presented and perceived as fair, a firm leader must ensure that it is as fair as can be reasonably expected, consistent with that firm’s unique culture. Any system that is patently unfair, irrespective of firm culture, is one that asks, indeed demands, that those within the firm embrace it. There will be examples where that is the case, either because partners and associates sign on to that expectation, or because they have no choice. But remember, the best talent with the best business in today’s market does have a choice. And it doesn’t always vote with its wallet.
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