sboghossian Partner Compensation Allocator
When to use this
Use this skill whenever:
- A managing partner or compensation committee is preparing annual or periodic partner draws.
- A firm wants to model compensation under a new allocation policy before implementing it.
- A partner disputes their allocated credit and a structured breakdown is needed.
- The firm is benchmarking total compensation against peer PEP (Profits per Equity Partner) figures.
- A newly promoted partner's first-year comp structure needs to be designed.
Do not use this as the sole basis for compensation decisions — it is a structured recommendation tool. Final decisions require human judgment and governance review.
Required inputs
| Input | Why it matters | Default if missing |
|---|---|---|
| Partner name / ID | Links output to the individual | Required; no default |
| Period (e.g., Q1 2025 or FY 2024) | All metrics must share the same denominator | Current fiscal year |
| Billable hours worked (own) | Direct revenue generation baseline | Pull from time records |
| Standard hourly rate | Converts hours to revenue value | Firm rate card |
| Allocated model | Determines weighting formula | Hybrid 50/30/20 |
| Originating client list | Credits the partner who brought in the client | Matter origination register |
| Working matter list | Credits active management of matters | Matter responsibility register |
| Supervising timekeeper hours | Credits oversight of associates | Time records by supervisor |
| Firm contribution activities | Training, BD, recruiting, committees | Self-report + HR records |
Optional inputs
- Collected realization rate per partner — adjusts comp for write-downs attributable to the partner's billing decisions; pairs with [[efirm-finance-realization-rate-tracker]].
- WIP at period end — factor pending billing into projected comp for accrual-basis firms.
- Peer benchmarks — external PEP data from surveys (Am Law 100, LACCA, LegalWeek) for context.
- Lockstep seniority tier — required if model = lockstep or hybrid.
- Non-equity partner adjustments — separate pool and formula for income/salaried partners.
Allocation models
1. Lockstep (seniority-equal)
All equity partners at the same seniority tier receive equal draws from the profit pool. No explicit origination or working credit.
- Best for: Long-established firms with deep institutional client relationships, or where teamwork culture is paramount.
- Risk: Reduces incentives for business development; younger partners may defect.
- Calculation: Total profit pool ÷ total lockstep units × partner's units.
2. Eat-What-You-Kill (originator-heavy)
Compensation driven almost entirely by origination credit — the partner who brought in the client keeps the lion's share.
- Best for: Lateral-heavy, entrepreneurial practices.
- Risk: Hoarding behavior; refusal to collaborate; client ownership disputes on departure.
- Typical weighting: 70–90% origination credit, 10–30% working credit, minimal firm contribution credit.
3. Hybrid (most common — recommended default)
Default formula: 50% originating + 30% working + 20% firm-contributions.
Sub-components:
| Credit type | Calculation |
|---|---|
| Originating credit | Revenue collected on matters the partner originated × 50% weighting |
| Working credit | Revenue worked on matters the partner was responsible attorney × 30% weighting |
| Supervision credit | Associate hours billed under partner supervision × blended rate × supervision factor (typically 0.15–0.25) |
| Firm contribution | Scored on 1–5 scale across: training sessions, BD pitches, recruiting hires, committee participation × 20% weighting |
Output format
The skill should produce a structured report for each partner covering:
PARTNER COMPENSATION RECOMMENDATION — [Partner Name] — [Period]
1. INPUT SUMMARY
Billable hours (own): [X hrs at $Y/hr = $Z]
Originating revenue collected: $A
Working revenue collected: $B
Supervision hours: C hrs
Firm contribution score: D/5
2. ALLOCATION (Hybrid 50/30/20)
Originating credit: 50% × $A = $A1
Working credit: 30% × $B = $B1
Firm contribution: 20% × (D/5) × [pool share] = $C1
Supervision bonus: C × rate × factor = $D1
─────────────────────────────────────
TOTAL COMP RECOMMENDATION: $T
3. BENCHMARKS
Firm average partner comp (period): $X
PEP (firm-wide): $Y
External benchmark (survey): $Z range
4. SENSITIVITY ANALYSIS
If origination weight ↑ to 60%: comp = $T2
If working weight ↑ to 40%: comp = $T3
If firm contribution dropped: comp = $T4
5. FLAGS
[Any anomalies: realization below avg, origination credit dispute, etc.]
Jurisdictional notes
| Jurisdiction | Specific considerations |
|---|---|
| US (Am Law) | PEP is the primary external benchmark. Lockstep largely abandoned at most firms post-1990s. Non-equity partner tier is common; distinguish equity vs. income. |
| UK (Magic/Silver Circle) | Modified lockstep still common; "black box" discretionary element at most firms. Salaried partner tier widely used. |
| MENA (GCC) | Partnership structures vary; some Gulf firms operate as sole practitioner or corporate entities under national law — formal equity partnership may not exist. Track profit distributions per ownership %. KSA firms may operate under a licensed professional company structure. |
| UAE onshore | UAE Federal Law on Commercial Companies governs; professional companies have specific requirements. |
| DIFC / ADGM | Partnerships possible under DIFC/ADGM partnership law; distributions governed by partnership agreement. |
| Lebanon | Bar affiliation required; partnership structures informal. |
| France | SCP/SEP/SELARL structures; remuneration governed partly by partnership deed and partly by CNBF (Caisse nationale des barreaux français) contributions. |
Common mistakes
- Double-counting origination and working credit when one partner does both — set firm policy on split.
- Ignoring realization — a partner originating large volumes of uncollected debt should not receive full origination credit.
- Static benchmarks — PEP data from prior years is not comparable to current performance; use same-year surveys.
- No supervision credit formula — without it, senior partners avoid associate delegation, harming leverage ratio.
- Failure to document — comp decisions without a written formula invite disputes and bar complaints (in some jurisdictions, partners are entitled to see the formula under partnership law).
Related skills
- [[efirm-finance-realization-rate-tracker]]
- [[efirm-finance-utilization-dashboard]]
- [[efirm-finance-wip-aging-report]]
- [[efirm-finance-collection-rate-tracker]]
- [[efirm-matter-creation-flow]]