Last year, Marc Dreier wrote a story for The National Law Journal, a sibling publication of the Daily Report, touting his model of a law firm in which only one person had an equity stake: Dreier himself would earn all the firm’s equity and control its expenses; partners would earn base salaries plus bonuses linked to how much business they brought in during the year. The idea, Dreier wrote, was to create a system in which “each partner feels fairly compensated for his or her work” instead of having compensation “diluted by subperforming partners.”
In the wake of Dreier’s arrest for attempting to swindle nearly $150 million from three investment groups, law firm experts say the Dreier model is likely dead. The reason is obvious: When one equity partner falls, the whole firm goes down with him.
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