Individual Compensation Plans and Negotiation Support

Paying lawyers properly is a complex process typically involving objective and subjective factors. Most firms have compensation systems for associates, income members, and equity members, but sometimes it is necessary to create individual pay agreements.

Setting pay for individual lawyers who don’t fit into any of a firm’s existing compensation systems typically is a negotiated process often initiated by the individual lawyer. Whether you are an individual lawyer who needs advice and support about your compensation agreement or a firm that needs help creating a compensation plan for a lawyer, we can help.

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Benefits

What can you accomplish with a solid compensation program and what can PerformLaw do for you?

The Process

How does a compensation services agreement work?

Resources

Where can I learn more about the topics I might want advice about

Benefits

The confidence of knowing you will receive objective feedback. Clients who engage PerformLaw for compensation services get objective, experienced, and practical advice about how to pay owners properly.

The ability to implement attorney performance improvement actions All our tools, templates, processes, market awareness and creative plan design expertise are included in the engagement.

The ability to more clearly understand your issues and opportunities and act on our recommendations. All our tools, templates, processes, market awareness and creative plan design expertise are included in the engagement.

A solution for the long term. All our engagements are designed to raise the level of client competence and promote self-sufficiency.

A partner in the negotiation process to ensure that a fair result is achieved.In addition to education, spreadsheets and models, you receive our expert advice and judgment during the negotiation process.

What PerformLaw can do for you:

  • We help clarify goals and expectations (Strategy).
  • We consult on the best tactics to achieve the goals (Identification of tasks and association with goals) and provide tools and processes.
  • We ensure clients have the information they need to make informed decisions.
  • We offer relevant and timely advice in all the key law firm management areas.
  • We are available when clients need us before, during and after an engagement.

THE PROCESS

INITIAL DISCOVERY AND INFORMATION REQUEST

Historical Timekeeping Performance

Originated and Worked

Worked but not Originated

Historical Origination Performance

Work Provided to Others

Model Assumptions

Current Written Compensation Agreement

Previous Compensation Calculations

Cost Sharing Documentation

ANALYSIS OF CURRENT COMPENSATION PLAN

Basic Compensation Model

Base Salary

W2
Benefits
1099
K1

Bonus

Draw

Fee Share

Timekeeping Incentives

Origination Incentives

Based on Billed or Collected

Firm Paid Costs

Attorney Paid Costs

POTENTIAL COMPENSATION APPROACHES

Base and Bonus Approaches

Low Base/ High Bonus

High Base/ Low Bonus

Guaranteed Compensation and Draws

Guaranteed Compensation

At-Risk Compensation

Draw against Collections

Cost Sharing

  • Identification of Direct Expenses
  • Identification of Indirect Expenses

Fee Share Models

Share of Working Timekeeper on Non-Originated Files

Share of Working Timekeeper on Originated Files

Share of Originated Work for Others

Profitability Bonus

Minimum Profit Threshold
Bonus Percentage

What is a fair share of generated profit beyond the threshold amount?

Cost Sharing

  • Identification of Direct Expenses
  • Identification of Indirect Expenses

Compensation for Non-Economic Contributions

Management

Training

Recruiting

Profitability-based Models

Timekeeper Profitability Pay

Origination Profitability Pay

Cost Allocation Agreement

  • Identification of Direct Expenses
  • Identification of Indirect Expenses

Minimum Expectations

Timekeeping

Originating

PROPOSED COMPENSATION PLAN AND NEGOTIATION SUPPORT

Create Proposed Model

Create Compensation Deal Points

Analyze Counter Proposals

Revise Deal Points

Document Final Compensation Agreement

Resources

NOT SURE WHERE TO BEGIN?

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