Perform-Law-2015-JPEGs-0007-CROPPED-e1435787666575.jpg

Law Firm Best Practices Blog

Compensating for Law Firm Profitability

Buildings-1-322245-edited.jpg

 

Compensating based on profitability ensures that a firm’s bonuses are tied to created profits. While more difficult to accomplish, the results are often better.  Looking at profitability information requires more transparency and information sharing of the firm’s cost structure.  This makes some partners uncomfortable. However, our experience has shown that when partners (including the most resistant ones) have a working knowledge of the impact of various elements on profitability,  a high-performance culture is often the end result. 

 


 


Consider the following basic formula:

 

Law-Firm-Compensation-Based-Profitability.jpg

 



Timekeeper_Profitability_Report-Assocates__C_Sample-870616-edited.jpg

An effective associate compensation system is aligned with law firm goals and will reward productivity. If your law firm is interested in profitability based compensation systems for law firm associates, the following articles will also be of interest: 


Previous Associate Pay Posts:

 

"HOW DO WE PAY ASSOCIATES" 

Overview of the necessary components and processes to develop an effective associate compensation system at your law firm. 

 

"SHOULD PAY FOLLOW PRACTICE AREA?" 

How should a firm compensate same-year associates working in different practice areas with materially differing billing rates?

 

"WINNING THE GAME OF ASSOCIATE COMPENSATION

This article reviews the components of a successful compensation system, including base pay and bonus pay. It discusses ways in which firms can approach these components in developing an associate compensation system.

 

 


 Learn More About Profitability Reporting for Your Law Firm

 

 

 

 

Subscribe to Blog

Blog Categories

law firm management concepts blog discusses relevant law firm topics

The Law Firm Management Concepts blog includes conceptual posts on important issues to law firms. These posts will correspond  to the posts found on our main blog ("Law Firm Best Practices") which offers detailed analysis and advice for putting concepts into practice.

VISIT THE BLOG