Part four in a six-part series on developing a successful client-centric culture and how to address the resulting operational implications.

How much are your partners worth to your firm? How should they be fairly and equitably compensated? That is an age-old question that consumes many hours behind closed doors at every law firm everywhere. Although I remain a staunch proponent of a balanced scorecard approach, there are emerging value-based characteristics that need to be incorporated into that system. This post discusses some of those emerging themes and how they relate to developing a more client-centric culture.

Let us begin with a simple example. Imagine two partners at an Am Law 200 firm who are the same from a statistical standpoint. No splits, no hidden statistics – everything is equal.

3 Year Avg. Statistic Partner A Partner B
Revenue $10,000,000 $10,000,000
Realization 95% 95%
Leverage 50% 50%
Inventory Cycle 60 Days 60 Days
Profit Margin % 50% 50%


Understandably, most firms would compensate these individuals at the same level. Compared to peer firms, a firm that takes this approach is usually ahead of the game because they look at important statistical factors like leverage, realization, inventory, and profit. They are rewarding what they should, statistically speaking. However, like with most statistics, there is nuance. For every objective metric, there is a subjective side that you should study. And if you want to learn more about the idea of taking a balanced scorecard approach to partner compensation, you can read the writeup from one of my presentations here. Instead, let discuss value.

Adding elements of value

If you expand the example above and add the following attributes to the two timekeeper’s books, how much of a difference would it make?

Book of Business Detail Partner A Partner B
Avg years with firm per client 20 plus years 2 years
Avg number of practice groups per client 5 1
Client acquisition cost Low High
Impact on firm prestige High Low
Gateway to new clients High Low
Mentorship and impact on associates High Low
Scalability of skill sets High Low


I think everyone would agree that if they were opening a new law firm, Partner A’s book of business would be much more appealing than Partner B’s. Steady work that is easier to attain and is a gateway to new work is superior then one-hit isolated clients that provide little to no additional impact. Yet, many firms would pay these individuals the same amount. It is a stark example that the value of one book of business does not translate completely using typical statistics seen in partner comp models worldwide. It is a reason that firms need to review the whole value a partner brings to the firm.

Gaining a broader perspective

A shift toward value analysis requires a deeper dive across multiple operations. It would take partner compensation outside of the pure financial spectrum. In the example above, the core details stem from experience management, human resources, pitch management, marketing, public relations, and more. Since it is only a sample of details or characteristics that would contribute to value, you can ascertain that understanding a partner’s contribution requires multiple technologies and multiple viewpoints. Most firms, however, are not able to analyze their partner base in this way. If yours is one such firm, you can start to remedy the situation.

Taking steps in the right direction

At Wilson Allen, we have advised our clients on how to start understanding the value of all their entities. This process begins at intake – be it a client, matter, strategy, or person. Then it involves measuring core attributes through the existence of that entity at the firm. Put simply – understanding value is primarily about picking a couple of key characteristics to monitor and having multi-operational processes in place to identify outcomes and paths. Consider the breadth of impact.

Understanding the breadth of impact

In the example above, Partner A has a significant breadth of impact indicated by skillsets, mentorship, prestige, and the number of practice groups working on the book. That last indicator would be easy to determine with almost any financial system that can provide a breakdown of hours, people engaged, and revenue. The other indicators are on the opposite side of the spectrum, requiring coordinated efforts by all operations to assess the value. If it is skillsets, then those need to be identified and managed through experience management. A move in that direction requires postmortems, HR skill maintenance, relationship statistics and mentorship monitoring, and more. To move toward that level of understanding, a firm must take baby steps first. To do so, holding a coordinated meeting with the appropriate operational departments can help you identify what to value and how to work together to make it happen.

Staying current with the trend

There has been a shift in recent years where more firms are assessing compensation in this way, which is a significant change from the status quo. While this approach can be lengthy, depending on the maturity of the firm’s data management practices and analytics capabilities, the cost of not doing so is high. Imagine if Partner A in the beginning example took their talents elsewhere because the firm did not value their contribution appropriately. The effort to perform value analysis, in that scenario, seems well worth the time.

We at Wilson Allen have diversified our services to be the preeminent experts across all facets of the business of law. From systems to operations to relationship management to mergers and compensation and everything in between, our team is well versed in anything and everything to support your business of law needs. If you are struggling with how to appropriately value the performance of all your timekeepers, please reach out to us. We are eager to help.

Part of developing a more client-centric culture is running as efficiently as possible and being agile and responsive to meet increasing client expectations and demand for an ever-higher quality of service. For many firms, that means adopting cloud technology. In the next blog post, Moving to the Cloud to Maximize Client Success: 5 Key Considerations, our subject matter experts will share perspectives and practical advice on adopting cloud technology.