About the book
How partners share profits is fundamental to driving strategy and providing competitive compensation for the firm’s best partners – all while supporting the firm’s underlying ethos and culture.
The firm’s profit sharing model is central to its partnership ethos and culture. In this comprehensive handbook Michael Roch and Ray D’ Cruz provide guidance for senior and managing partners, partnership boards, remuneration committees and all other involvement in the partner compensation process on designing effective profit sharing systems, reaching fair reward decisions efficiently and implementing contribution management processes that motivate partners.
Looking beyond the numbers, the authors balance the big picture with the detialed how-to for any professional partnership, irrespective of geography, size and maturity.
Filled with practical insights, this book draws on principles of partnership, motivation and incentives in human capital management, and executive compensation in closely held businesses.
Trends shaping partner reward
The three partner remuneration elements in context
The seven primary partner reward systems
Formula systems: cost sharing, ‘eat what you kill’ and fixed allocation
Merit systems: financially driven versus holistic meritocracies
Lockstep systems and their variations
A partner’s profit-sharing waterfall: drawings, bonuses and distributions
Corporations operating as partnerships, internal markets and talent ecosystems
The future of partner contribution management
Motivating achievement-orientated partners
Using partner contribution frameworks to align partner contribution with firm strategy
Aligning personal objectives with partner contribution expectations
Using measures, metrics and KPIs
Partner accountability through ongoing conversations and informal check-ins
Self-assessments, ratings and other design considerations for formal partner reviews
Conducting effective partner review conversations
Addressing underperformance
Using technology for better partner contribution management
Analytics: using quantitative and qualitative data for evidence-based decisions
The role of HR and business services in partner contribution management
Key elements of effective reward governance
Remuneration committee basics: when to have one, its remit and its members
Managing to an annual calendar
Reward round preparation, heuristics and decision aids
Reaching reward conclusions while avoiding biases
Transparency in reward communications: nuances of open and closed compensation system
Appeals: benefits, drawbacks and process considerations
Collaboration among partners
Rewarding partners in management roles
Diversity, equity and inclusion
Partner reward in international partnerships
Engaging partners in remuneration policy changes
Well-being and mental health
Ten principles for partner remuneration systems in ambitious professional services firms
