Partner Comp by Practice Group; Comp Cuts; Return to Office

MLA released its 2024 Partner Compensation survey, including responses from 1,718 partners in the AmLaw 100 and 200.   Partners in all practice areas saw compensation increases relative to the 2022 and 2014 surveys, reflecting firms' continued profit growth, largely due to continued rate increases.  

72% of partners were satisfied with their compensation (25% Very Satisfied, 36% Moderately Satisfied; 11% Slightly Satisfied), as the rising tide of continued profit growth has lifted most boats.  Satisfaction rates held across practices, even when comparing practices with a large compensation delta like Corporate & L&E (75% vs. 74% Satisfaction, despite $1M delta). 

There was little difference in satisfaction rates between men & women, in contrast to the 2022 survey.  However, there was a substantial difference between equity and non-equity partners perhaps reflecting previously reported tension between the groups; 34% of equity partners reported that they were very satisfied, compared to only 10% of non-equity partners.

Equity partners reported avg. compensation that was 3X that of non-equity partners.  Origination appears to be the predominant factor in setting compensation, with regression analysis revealing that originations account for 64% of compensation variation among partners.  Equity partners surveyed originated on average $4.95M vs. $971K among non-equity partners.  

Comp Cuts

Coinciding with continued profit growth, firms are cutting compensation for a relatively smaller % of their partnership (Cutting Partner Compensation Becomes Routine in Big Law, Andrew Maloney, 10/14/24, American Lawyer).  In leaner years, it is common for 1/3 of partners to move down, 1/3 to stay the same, and 1/3 to move up, according to law firm consultant Kristin Stark.  In more profitable recent years, the percentage of partners facing compensation reductions can be as low as 10% to 20%, and a significant number in that 10%-20% are retiring partners or partners winding down their practices.

Office Attendance: Put Up or Shut Up

Law firm leaders are signaling that they will begin to hold partners to office attendance policies in the coming months, by reducing draws or withholding bonuses ('Put Up or Shut Up' in Office Attendance: Law Firm Leaders Still Hold the Cards, Andrew Maloney, 9/20/24, American Lawyer).  Major clients are upping the ante in bringing employees back to the office, and law firm leaders are concerned about clients' perception.