Survey of American Lawyers at Major Law Firms: Opinion of Shareholder Compensation Models

This study presents the results of a survey of shareholders at more than 70 major American law firms. The study helps its readers to answer questions such as: how happy are shareholders with the current methods of distributing compensation to shareholders? What percentage is distributed in the form of salaries? In bonuses? How many firms have reserve funds and what percentage of total revenues after overhead do these funds account for? How many firms use a secret ballot for compensation issues? What do partners feel should be changed about the current compensation system? How much does approval of the current system vary by gender, age, field of legal specialization, size of law firm and other factors? How do firms oversee compensation committees? What are the penalties for arrears in collections or tardy submission of time sheets? Just a few of the study’s many findings are that: The younger the shareholder, the more likely they were to consider their law firm’s partner compensation scheme to be opaque and subjective. Lawyers in real estate law were much more likely than other lawyers to consider their firm’s partner compensation scheme to be clear and transparent. For the largest firms, those with more than 200 lawyers, 56.25% of partners fixed their percentage shares at the beginning of the year and only 10.42% determined them at the end of the year, a ratio of more than 5:1. For firms with from 25-49 lawyers this ratio was roughly 1:1.