It is fast becoming an imperative for elite firms to widen the range of their partner compensation. Too narrow a range allows competitors with wider ranges to lure away the most commercially successful partners. We saw this in London when the U.S. firms arrived and undid the elite London firms’ lockstep models. We are seeing this increasingly in New York where firms like Kirkland & Ellis, who reportedly moved recently to a ratio of the compensation of their highest- to lowest-compensated partners of 9-1, pose a renewed threat to old-line firms with narrow, 3-1-type ratios.
