Top legal partners want to ‘eat what they kill’, not share profits

afr.com:

High-performing partners at Australia’s biggest law firms are agitating to take home a greater share of profit, as firms increasingly look towards US-style “eat what you kill” partner remuneration models, according to legal recruiters.

Top-tier Australian firms such as Mallesons, Freehills and Allens have traditionally operated on a “lockstep” model of partner remuneration, where pay is largely determined by seniority, rather than individual financial performance.

Jonathan Walmsley says partners want to change the way they are paid. 

As firms find themselves in a post-pandemic slump, mid-career partners are being pushed to do more to bring revenue through the door, but are not necessarily seeing the financial reward, recruiters say, breeding agitation about pay structure and a lack of recognition for shouldering the burden of a flat legal market.

“The traditional model where you serve time and go up through the ranks is being challenged in order to reward people who are building bigger practices and client bases,” Jonathan Walmsley, head of recruitment firm Marsden’s Australian division, told The Australian Financial Review.

Recruiters say more individualistic models offer firms greater flexibility to retain high-performing partners, and greater scope to poach high-value rainmakers from competing firms.

Flat revenues have prompted firms to place increased emphasis on performance management of underperforming partners.

“Law firms have been stuck in their ways for a number of years, and it’s probably time there was a shake-up given the current economic conditions,” Matt Brown, a senior associate in the legal division of recruiting firm u&u, said.

“Partners who have been in the same firm for a while want to be remunerated