The old models of partner compensation are increasingly keeping firms from the client-focused culture needed to succeed today.

In the March 2018 issue of American Lawyer, I discuss how partner compensation can accelerate, or impede, business development. Here are a few nuggets and additional commentary:

"If your compensation plan and your business strategy are in conflict, then your compensation plan IS your business strategy." (Paraphrasing David Maister)

Strategic planning, marketing plans, and teams of bright-eyed business development professionals can only do so much if the partners are rewarded for doing something else, anything else, other than growing the firm's business profitably.

"When partners who refuse to collaborate, cross-sell or delegate remain at the top of the compensation ladder, the clear message is that individual results matter most. In fact, this sort of partner fails to meet the most fundamental fiduciary requirements of an owner and instead poses an organizational risk. Leaders who ignore or foster this behavior have also failed to meet their obligations."

I don't necessarily find partners who pursue their own economic self interest to be selfish so much as I find firm leaders who recognize and yet allow this behavior to be lazy. Or incompetent. Or both. It's firm management's responsibility to align incentives so that what's good for the partner is also what's good for the partnership. But to be clear, equity partners who deliberately refuse to act like owners should be ousted. Let them start their own law firms and keep all the spoils to themselves.

"The best rainmakers may open a new discussion, but the most consultative partners will help the client scope the issue, and the top technical experts will help devise a project plan, and the finance team and management will craft a suitable budget. It takes a village. Contrast this with the usual approach of rushing every new contact from 'Nice to meet you' to 'Here’s a brochure outlining our capabilities and a proposal to do work for you someday on something.'"

When incentives are properly aligned, partners are encouraged to contribute their highest and best use. Contributions will differ, but everyone's contribution is valued. It's a myth that every partner is or should be capable of doing everything equally well. A high performing law firm, like any high performing organization, is comprised of specialists whose individual contributions come together to create an output greater than the sum of its parts. Allowing, or fostering, a culture where partners can do that which they do best doesn't reduce motivation. It reduces wasted time and energy.