Everything you need to know to manage partner reward in your firm

Understand the forces shaping the future of partner performance and reward

A comprehensive handbook covering reward structures and governance, and how firms manage, measure and assess partner contribution.

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About the book

A firm’s profit sharing model is central to its partnership ethos and culture.

While one adage says that “there are as many profit-sharing systems as there are partnerships”, there has recently been the emergence of a global practice about what “merit” means and how risk and reward are shared among partners in professional service firms.

The Partner Remuneration Handbook, Michael Roch and Ray D’Cruz provide guidance on designing effective profit-sharing systems, reaching fair reward decisions efficiently and implementing motivating contribution management processes.

Filled with practical insights, this book draws on principles of partnership, motivation and incentives in human capital management, and executive compensation in closely held businesses.

Table of contents

Part I. Introduction

1. Trends shaping partner reward

2. The three partner remuneration elements in context

Part II. Reward structures in professional partnerships

3. The seven primary partner reward systems

4. Formula systems: cost sharing, ‘eat what you kill’ and fixed allocation

5. Merit systems: financially driven versus holistic meritocracies

6. Lockstep systems and their variations

7. A partner’s profit-sharing waterfall: drawings, bonuses and distributions

8. Corporations operating as partnerships, internal markets and talent ecosystems

Part III. Managing partner contribution

9. The future of partner contribution management

10.Motivating achievement-orientated partners

11.Using partner contribution frameworks to align partner contribution with firm strategy

12. Aligning personal objectives with partner contribution expectations

13.Using measures, metrics and KPIs

14. Partner accountability through ongoing conversations and informal check-ins

15. Self-assessments, ratings and other design considerations for formal partner reviews

16. Conducting effective partner review conversations

17. Addressing underperformance

18. Using technology for better partner contribution management

19. Analytics: using quantitative and qualitative data for evidence-based decisions

20. The role of HR and business services in partner contribution management

Part IV. Partner reward governance and decision making

21. Key elements of effective reward governance

22.Remuneration committee basics: when to have one, its remit and its members

23.Managing to an annual calendar

24. Reward round preparation, heuristics and decision aids

25.Reaching reward conclusions while avoiding biases

26. Transparency in reward communications: nuances of open and closed compensation system

27. Appeals: benefits, drawbacks and process considerations

Part V. Special issues

28. Collaboration among partners

29.Rewarding partners in management roles

30.Diversity, equity and inclusion

31. Partner reward in international partnerships

32.Engaging partners in remuneration policy changes

33. Well-being and mental health

Part VI. The way ahead

34. Ten principles for partner remuneration systems in ambitious professional services firms

Michael Roch

Michael Roch is a global expert in partnerships, alliances and ecosystems. He is the Managing Director of MHPR Advisors.

Michael helps cultivate cohesive partnerships in pursuit of a winning strategy. Beyond taking clients by the hand, he has been in the “hot seat” as Managing Partner of an internationally operating consulting firm and as Europe Co-CEO for a global platform-based talent ecosystem.

Michael’s partnership expertise gained throughout his career forms the basis of this comprehensive guide to partner remuneration in professional service firms.

Ray D’Cruz

Ray D’Cruz is CEO of Performance Leader, a consulting and software business that helps professional services firms harness the creativity and intelligence of their partners and employees.

Ray helps organizations solve complex problems in areas such performance, collaboration and feedback through a flexible approach and deep sector knowledge.

Working in leading professional services firms as both a lawyer and HR leader means Ray understands the nuances of professional services and partnership structures. He has used this expert knowledge to co-create this comprehensive guide to partner remuneration in professional service firms.