By Koshy Koshy (Flickr: Male Tiger Ranthambhore) [CC BY 2.0 (], via Wikimedia Commons

Even the most effective partner compensation systems sometimes have difficulty basing a partner's remuneration on the profitability of his or her practice.

This is because they try to take too simplistic an approach to a complex and highly individual concept.

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In a previous posting in this blog, we pointed out how an "eat what you kill" system of partner compensation can introduce toxic elements into a law firm, which frequently counteract any motivating effect on lawyer performance.

This short article outlines the features of an alternative to "eat what you kill" compensation in law firms. It works well in any size law firm, but is especially suited to small and midsize firms.

By China's Tiger at English Wikipedia, CC BY-SA 2.5,

An "eat what you kill" system of partner compensation does have some good points for some law firms.

For most law firms, however, "eat what you kill" can kill the partnership.

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In the past two years, we have observed a new trend in some legal markets. For a variety of reasons, senior associates and non-equity partners are leaving their law firms to start their own. 

A common factor in these departures, however, is a conclusion that there no longer is a persuasive business case to remain in the firm, and that, notwithstanding the risks, the opportunities are better in one's own firm.

Are you thinking about starting your own law firm? Here are some things to think about.

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No matter how large, how famous, or how successful your law firm has been in the past...

...If you want to increase the chances of your law firm still being in business ten years from now, you must have a Chief Innovation Officer.

Sorry, there are no exceptions.

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A recurring theme of this blog has been that smaller law firms have much less tolerance for poor management. The loss of just a few clients or even one partner can have a disproportionately large impact than in a larger firm.

One of the biggest risks to a small law firm -- and one that is frequently overlooked or, in some partnerships, deliberately ignored -- is its partner compensation system.

By Acabashi (Own work) [CC BY-SA 4.0 (], via Wikimedia Commons

Although rapidly-changing, intensely-competitive market dynamics will continue to shape the strategic context in which most law firms will operate in 2018, the new year is also proving to be internally challenging, especially for small and midsize firms.

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In most countries, women significantly outnumber men in law schools and as associates in law firms. Yet men continue to outnumber women -- often by substantial margins -- in most law firm partnerships and similar senior positions.

A new report by the Legal Policy and Research Unit of the International Bar Association, released today, examines this phenomenon and the steps that law firms should take to respond to this significant loss of legal talent and business leadership. Click here to download Women in Commercial Legal Practice,

It should be mandatory reading in every law firm.

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For most firms, a 1-to-4 leverage ratio has long been considered to indicate a desirable level of profitability, while also being manageable.

What will happen when artificial intelligence systems give law firms the potential to generate leverage of 1-to-400?

That's right: a hundred-fold increase in lawyer productivity.

It is not as far-fetched or as far-off as you might think.



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Law firm leaders and planners -- indeed, all lawyers -- are right to be concerned about the future of the legal profession. We can expect significant changes, powered by increasingly sophisticated client expectations and the more powerful service delivery capabilities of advanced technology, to redefine what a "law firm" will look like and how it will operate in the 2020s...

...which are only three years away.