Partner Remuneration Survey Reveals Partner Priorities and Concerns in their Firm’s Remuneration System
- more than a quarter of partners (26%) placed more importance on maximizing their own profit share compared to their partners, and 22% placed more importance on maximising their own profit share relative to the market, above other factors, including fairness of the system, or the culture and ethos of the firm;
- a third of partners (33%) felt that their partner remuneration system was not sufficiently transparent;
- almost half (44%) reported that their firm fails to communicate with them individually about their own performance and its likely impact on their profit share allocation;
- around a quarter (23%) did not trust their firm’s remuneration system to produce fair results for partners; and
- just over a quarter (26%) did not believe that their remuneration system was aligned to and driving firm’s business strategy.
Partner Remuneration Seminar Video and Report
You can watch or download a video of the re-run of that Partner Contribution and Reward seminar here.
How Should Firms Respond?
The results highlight that firms need to do more to address the views and concerns of significantly sized minorities of dissatisfied partners, including by:
a. Ensuring as far as possible that all partners in the firm have confidence in the clarity and fairness of the system and that it will produce fair results for all;
b. Introducing greater transparency into their partner remuneration system;
c. Revisiting their partner evaluation and remuneration systems to ensure that they are more closely aligned to and driving their firm’s overall business strategy;
d. Ensuring that their firm’s remuneration system adequately and fairly rewards important non-financial contributions rather than focusing solely or predominantly on financial contribution of partners;
e. Dramatically improving communications with partners individually regarding their own performance and its likely impact on their pay under the firm’s remuneration system; and
f. Identifying and carefully managing those partners who are more likely to place their own interests, particularly in respect of pay, above the wider interests of the firm and other partners.
Clare Murray discusses the importance of partner remuneration in professional services firms right and working to drive the firm’s business strategy in a short video here.
Professional Practices Alliance
The Professional Practices Alliance is a multidisciplinary collaboration between leading independent legal, accounting and remuneration consultancy firms which specialise in advising professional partnerships on partnership law, tax, accounting, discrimination and whistleblowing, remuneration, compliance and regulatory issues affecting professional services firms.
The Alliance members are CM Murray LLP, Maurice Turnor Gardner LLP, Buzzacott LLP, Hierons LLP and partner remuneration consultancy PEP-UP Consulting Ltd.