Compensating Partners and Associates in Trying Economic Times
To say that we are in trying economic times may be a bit of an understatement if you are un/under-employed or employed at a reduced level of compensation. Law firms have struggled to find equilibrium between the work available and the staffing required to do it, as well as between the price clients will pay for that work and the cost to the firm to service it.
Firms have been making serial adjustments to their personnel ranks. Layoffs, furloughs, reduced hours, wage freezes and reductions have all been part of the arsenal. There is a tremendous amount of humanity in the profession – you can sense it in the concern that leadership has over the layoffs, wage freezes/reductions and how they affect their people. But at the same time, there is also less patience with underperforming lawyers. Firm cultures are under great stress. The cultural belief that “we are all in this together” works within limits. This recession has stretched, and in many cases exceeded, those limits. Much of this has to do with the economic model of private law practice in the US.
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