High quality law firm leadership cannot as easily be replaced as retained. Therefore, a firm must be prepared to reward its managing partner for his or her success in as many different ways as success is measured by a particular law firm. To the extent that a firm’s partners do not properly compensate their managing partner, yet wish to retain him or her in the leadership role, the firm’s managing partner will become discouraged and lack the incentive to continue to perform his or her management and leadership activities, since the firm’s success will undoubtedly lead to more dollars for other partners.
Recognizing Time Devotion
Two approaches to reducing managing partners’ concern about receiving reduced compensation because they have fewer billable hours and/or lower revenue from their personal production are setting reduced billable hourly goals and paying a fixed stipend for managing the firm. For example, rather than adjusting work goals of the managing partner vis-a-vis other partners, many firms assign a fixed sum to compensate the managing partner for managing the firm, i.e., $40,000, $50,000, etc.
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