The Material Economy of Compensation
The Material Economy of Compensation
Chapter 6 describes how law firm partner compensation systems allocate financial rewards. It describes the elements of the most common systems, and how firms today use compensation more explicitly than before to provide incentives for partner financial productivity. It introduces the concept of rainmakers, who are partners who generate significant business for the firm, and service partners, who do the work for the clients that rainmakers bring to the firm. The chapter notes increasing emphasis in compensation on what is known as "origination," which is bringing clients to the firm. It then describes how a firm's compensation system is based both on the application of criteria by a firm's compensation committee, and by the results of an internal market among lawyers in the firm in which credit for origination is allocated through informal negotiations. The chapter discusses how the operation of this internal market can disadvantage women with respect to a firm's compensation decision.
Keywords: compensation, rainmakers, service partners, origination credit, compensation committee
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