Compensation, or how to divide what is left over, is one of the most difficult challenges facing any law firm management committee, whether a two-person firm or a 2,000-person firm. There are several objectives one needs to address in making the ultimate decision of division. First, the system must be fair and must be perceived to be fair. Second, the system must be provocative; in other words, the system must encourage the attainment of the goals set by the firm, whether they be hours worked, dollars collected, new clients attracted to the firm, or any other goal.
The goals of the firm may be future looking, such as providing for succession to the next generation and creating a legacy; or the goals of the firm may focus on the here and now, taking as much money from current revenue as possible.