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In ‘pervasive’ development, some regulation corporations reward…
Regulation Companies
In ‘pervasive’ development, some regulation corporations reward companions by creating new tiers or extra shares
By Debra Cassens Weiss
July 16, 2025, 2:00 pm CDT
Some regulation corporations are including extra certainty and fairness for prime rainmakers by creating new tiers or extra shares to spice up their base compensation, in keeping with a report by Regulation.com.
The modifications to compensation construction are “probably the most pervasive developments” proper now, says regulation agency pay advisor Blane Prescott, who spoke with Regulation.com earlier this yr.
One agency making a change is Paul, Weiss, Rifkind, Wharton & Garrison, the article says. Underneath its prior system, prime performers obtained 500 shares within the agency and have been eligible for a bonus along with their share compensation. Final yr, the agency modified the system to award greater than 500 shares to prime companions whereas decreasing eligible bonus quantities. That tied larger compensation to fairness and made it extra predictable.
One other instance is Latham & Watkins, which makes use of a points-based compensation system. Beforehand companions have been assigned 300 to 900 factors. The regulation agency created two new tiers of factors in order that prime performers get 1,300 or 1,700 factors, resulting in a rise in base pay, in keeping with a previous Regulation.com report on the change.
Growing base compensation for prime performers can depart extra money within the bonus pool for different companions, mentioned regulation agency advisor Lisa Smith in an interview with Regulation.com. She warned of a draw back, nevertheless.
As companions scramble to be positioned in larger fairness tiers, corporations might fall sufferer to a form of grade inflation, she mentioned. Companies will should be very clear about what sort of efficiency is required to realize the highest ranges.
“Managing these sorts of expectations turns into necessary,” Smith informed Regulation.com.
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