Collegiate vs. Eat/Kill – the battle of the remuneration models

Collegiate vs. Eat/Kill – the battle of the remuneration models

The topic of which remuneration model works best in a law firm is not a new one. Law firms are always trying to find ways to improve their performance financially and culturally, so as to increase their competitiveness in the talent market. A recent article in The Australian Financial Review (6 February 2015 pge 32) talked about the fact that many firms are now moving away from the traditional lock step model, based on seniority, to a more performance related model based on fees and clients introduced.

I think the description of these models can be misleading. I have yet to find a law firm that doesn’t value performance. Even firms that claim to have a collegiate sharing model, and espousing a lock step model and philosophy, still expect a certain level of performance that is almost always linked in some way to projected remuneration.

So if that is the case then why are partners still wary of pure performance based models? In my opinion there are a number of reasons:

Market Perception

There is a perception that firms that openly espouse a performance culture must be more “ruthless and cutthroat” and that the culture must suffer as a result. I often get that feedback when speaking to prospective candidate partners. There is a fear of being judged on numbers alone or of joining a cold and soulless firm that has no cultural glue to hold it together.


Secondly, for many firms, lock step is a tradition – it is based on a trade-off between partners in their early career working more and getting paid less proportionately as a form of paying their dues so that they too can be rewarded later on in their career with a secure and lucrative income. This model did work well for many firms and still works for some. However the market has shifted where firms that offer a performance based model can now lure away under-rewarded, but high achieving junior partners which then leaves these more traditional firms with the under-performing but over paid partners. I have seen this happen many times where a firm does not adjust its remuneration model to reflect contribution sufficiently and ends up left with an increasingly less profitable firm as the talented and higher performing partners leave.

Non-financial qualities not rewarded

On the other hand the reason why more performance based firms get a bad rap is that, if administered incorrectly, only the financial performance of each individual partner gets measured. In this scenario, partners that might do the right thing by sharing work with their more junior colleagues to encourage them, might find themselves being penalised financially. This is despite the fact that they are exhibiting the behaviours of an ideal partner and may in fact be “contributing” more than another partner, not just financially but also in other ways that count – to the future success and sustainability of the firm. On the other hand partners that only contribute financially but are bad for morale can flourish which eventually negatively undermines the firm’s culture and leads to a poor market perception.

It is not that firms and partners don’t want a performance based model it is more that they are trying to balance the age old tension between encouraging partners to hunt for work through rewarding them for being business builders, versus encouraging a collegiate and sharing approach to work where partners feel comfortable sharing work with colleagues whose skills might be better suited to the work and growing the brand of the firm. My experience, from working with a large number of national and global firms, is that the answer does not lie just with resolving the remuneration model dilemma. It lies with having the right leader at the helm.

As a profession we work better with structure and within frameworks and clearly set out models. This ensures that we feel secure in knowing what is expected of us and how we are tracking. However it is not just the CHOICE of model that shoulders the burden of balancing these two imperatives, but the WAY in which the model is administered: the everyday nitty gritty of HOW the firm is run by the leader, which has the greatest impact on the success or otherwise of any model employed.

There are many examples of successful firms with different remuneration models that have thrived because of the quality of the leader and their ability to ensure that partners that contribute on all levels are rewarded and made to feel valued.

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