Byte of Prevention Blog

by Jay Reeves |

The ABCs of Attorney Compensation: An Inside Peek

Is your attorney compensation model outdated?

If it rewards individual behavior, encourages silo practices and discourages collaboration, it probably is.

“Outdated compensation models put the lawyer at direct odds with their clients’ interests,” writes Brenda Barnes, CPA, MBA and co-author of RESPECT: An Insight to Attorney Compensation Plans. “Creating a new compensation plan for the modern law firm will better align lawyer and firm interests and lawyer and client interests. Modern compensation plans are especially important in recruiting and retaining the next generation of lawyers.”

Order a copy of RESPECT: An Insight to Attorney Compensation Plans.

Below is a sneak preview of how the book defines the basic attorney compensation plan terms.

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Sneak Preview of RESPECT: An Insight into Attorney Compensation Plans

Below are some key definitions from RESPECT: An Insight to Attorney Compensation Plans, by Brenda Barnes and Camille Stell (reprinted with permission of the authors):

Equity partners. Equity partners are law firm owners, and their pay is from their share of the firm’s profits in a given year. Some law firm formation includes shareholders rather than partners.

Non-equity partners. Non-equity partners are not owners, and they are not paid a salary. This is a distinction that is usually not visible outside the law firm.

Equal partnerships. This system is typically used by small law firms. The partners agree to share in the profits equally or equally within defined groups.

Incentive-based systems. In the 1940s, the Boston law firm Hale and Dorr is said to have created the first incentive-based compensation plan, The firm identified lawyers in three categories. Finder – The lawyer as rainmaker who brings in the client. Minder – The lawyer who is responsible for managing the client relationship. Grinder – The lawyer, often the associate, who is responsible for doing the client work.

Eat-What-You-Kill. This system is common in small law firms. These firms sometimes operate as a collective of solo lawyers who share common space and employees with each lawyer paying their share of the overhead cost.

Lockstep Systems. The Cravath System relied on recruiting the best law school graduates, training those associates by the best lawyers, and compensating them well. This was at a time when most law firm associates were only paid for work they brought to the law firm. Cravath’s idea resulted in law school graduates who became excellent lawyers and as they rose through the ranks, they would remain loyal to the firm that had invested in them. This system was adopted by most Biglaw firms.

Modified Lockstep Systems. Salaries are not capped by seniority, but merit contributions allow firms to offer top salaries.


SOURCE: RESPECT – An Insight to Attorney Compensation Plans by Brenda Barnes and Camille Stell - Lawyers Mutual Insurance Company (


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