In order to boost efforts to recruit the top lateral partners, Paul Weiss has moved even further away from modified lockstep partner compensation. They’re reportedly adopting a “black box” system that will obscure partner compensation in order to minimize discontent and tensions within the partnership.
As reported by Law.com:
The adoption of a nontransparent pay system comes as leaders at Paul Weiss seek to reduce tensions among partners as the firm widens the spread of compensation with large investments in recruiting and retaining rainmakers from competitors, the people said. In 2023, Paul Weiss recruited a trio of Kirkland & Ellis transactions partners believed to have scored $20 million in annual pay.
Chair Brad Karp hasn’t responded to these reports, but has previously said the firm will do what it needs to do on partner pay in order to say on top of the heap, “We are not doctrinaire and we have adjusted our system in recent years to deal with changing market realities and to maintain our competitive edge.”
Part of the new plan will be a bigger bonus pool for partners — all the better to nimbly respond to changes in a practice area profitability without changing the partners’ shares within the compensation system. As consultant Kent Zimmermann previously noted, “If you’re producing a certain value for firms consistently and then you have a spike, the bonus allows for additional compensation for that spike.”
Other top firms that have moved to a black box on partner comp include Ropes & Gray, Fried Frank, and Jones Day.
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.