Many law firms have origination policies which stipulate that partners, and in some cases associates, who originate business are entitled to a certain percentage of the revenue they helped bring to a law firm. In certain instances, it is simple to attribute origination, since it is clear which lawyer is responsible for bringing a client into a law firm. However, in other circumstances, it can be a little less clear, since multiple lawyers might be involved with originating business. Since origination credit can amount to significant sums of money, some lawyers have heated arguments about who should get origination credit for a matter.
One partner I worked for at a law firm trashed talked one of his colleagues for unfairly trying to claim origination on matters this other partner had almost no connection to. The partner I was speaking with told me that if this other partner walked by an office while someone was on the phone signing a client, that partner would ask for a percentage of the origination amount. This was almost assuredly a joke, but there are some situations when partners can claim origination credit when they probably don’t deserve any.
I once heard a story of a partner who was mistakenly sent an email about a new case that was meant for another partner of the firm. The other partner was expecting this prospective client to reach out, but the prospective client made a mistake when he looked at the law firm’s website and decided to email the wrong partner. Once the mistake was cleared up, the appropriate partner onboarded the client and worked on the matter.
When it came time to figure out origination, the partner who wrongly received the client email asked that he share origination credit. This caused some tension since the partner for whom the email was originally intended did all the work to receive the commission and got the prospective client through his professional network. In the end, the partner who wrongly received the email got a small percentage of the commission, which mostly resolved the issue.
There can also sometimes be confusion about origination policies at firms that should be hashed out in advance to ensure that no one is upset with the outcome. Toward the beginning of my career, I originated a relatively small matter to the law firm at which I worked. I spoke to my direct supervisor, who told me that I was entitled to a 20% origination bonus on all of the work I performed on the matter. This seemed like a solid origination amount, so I was pretty happy with this outcome, and I had plans to try to originate more work to that firm.
However, the managing partner at the firm later told me that associates at that shop were only entitled to a 10% bonus on work they originated to our shop. I was kind of upset about this lower rate since this meant I would receive thousands of dollars less than I was expecting. The partners ultimately compromised and let me keep 15% of the revenue I helped originate, and that was the agreed-upon percentage for any associate that later originated work to our firm. This mostly resolved the issue and helped prevent future issues from arising.
All told, whenever money is involved, there are undoubtedly disputes will come up about who is entitled to a given share of revenue. In some instances, lawyers can agree to split origination in order to smooth over any disagreements. In addition, having an established origination policy established can help reduce the likelihood that an origination battle will break out at a law firm.
Jordan Rothman is a partner of The Rothman Law Firm, a full-service New York and New Jersey law firm. He is also the founder of Student Debt Diaries, a website discussing how he paid off his student loans. You can reach Jordan through email at jordan@rothman.law.
