While it’s true that the post-pandemic period produced a demand-driven boom of work for law firms, that productivity was not maintained in 2023 and seems unlikely to return in 2024. With lowered demand volume coupled with bloated ranks of associates and nonequity partners comes a serious need to rethink firms’ business models, from rate hikes to higher client expectations to outmoded compensation systems. New approaches to compensation can help directly address these issues.

It is worth noting that at a high level, it’s becoming increasingly true that a firm’s compensation structure reflects its core ideals. Firms are asking more from partners, and higher levels of productivity correlate with increasing profitability. But productivity goes beyond the traditional measure of billable hours. Firms that will succeed in the coming years will compensate fairly based on a clear set of guidelines that align with their values.