The first and most common method is for the distributable profit to be divided by the aggregate amount of points allocated to partners to arrive at a points value which will of course vary from year to year as profits and the number of points in play , go up and down in each accounting year. The second method, which is less common, is to attribute a fixed value to each point. This is sometimes useful in order to provide a differential points value when the firm has different offices operating under wholly different market and profitability conditions.
For the purposes of this article we have assumed that plateau partners will have points and an incoming partner will be allocated an initial holding of points, the number of which will vary depending on three key criteria.
In general terms, the initial allocation of points should represent for the incoming partner a marked but not necessarily dramatic improvement on his previous salary as an associate or fixed share partner. An old and outdated rule of thumb was that the top to bottom ratio on a lockstep would be about two to one and therefore an initial points allocation of 50 points was not uncommon.
However, as the profitability positions of firms have polarised between the very rich leading commercial firms at one extreme and the struggling High Street firm at the other, the top-bottom capitals?
In some firms this ratio is now more than three to one, whereas at the other extreme the room for any differential at all between top and bottom can be very small.
If for example, a firm is paying its senior associates or salaried partners the equivalent of 60 points, there is not much room for manoeuvre. In that case, the salaried partner would presumably expect to receive a profit share of at least 70 points if she were an incoming Equity Partner. This polarisation also affects the number of annual steps on the Lockstep which can be as many as ten annual steps, or as few as two. Because, as we know, the Devil is in the detail. The second principle is that we have abandoned assessing each other on the basis of the "traditional" financial performance parameters usually applied in the legal sector, evaluating the individual partner in isolation.
Now we go by so-called conduct parameters. The third principle is that the Bech-Bruun model relies on us working closely together and jointly generating the highest. Consequently, the Bech-Bruun model means that there is no financial gain from competing internally.
The Bech-Bruun model eliminates concepts such as "my own clients" and "my revenue". There is no bonus for partners who brought in more revenue from "their own clients" than others did. Nor is there any risk of a reduced salary or being enrolled in special schemes if "your own clients" bring in less revenue.
It is a joint effort — and the clients are ours. A unique model On a global scale, very few law firms apply a model like the Bech-Bruun model. Start a 3-day Trial Now Subscribe Today. Already a subscriber? Sign In Now. By Rose Walker. By Linda A. By Krishnan Nair. Talent Aquisition Partner. License our industry-leading legal content to extend your thought leadership and build your brand. Join the industry's top owners, investors, developers, brokers and financiers for the real estate healthcare event of the year!
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