Compensating Partners for Nonbillable Time

Source: The Marc Rosenberg Blog

The following blog post by Marc Rosenberg is reproduced in its entirety with permission.

It's often been said that it's more important what a partner does with his/her nonbillable time than billable time. Since a large portion of billable work performed by partners can be done by a staff person, firms need their partners to delegate billable work so they can focus on growing the firm, making it more profitable and successful. Examples of intangibles are practice development, developing staff, managing the firm, cross-selling, teamwork and living/breathing the firm's core values.

A quick check of The Rosenberg Practice Management Survey shows that 80 percent of all partners posted 1,200 or less partner billable hours. One of the main reasons for this being less than half their total hours is to free up their time to perform the intangibles.

If performance of intangibles is so important, how should this be factored into the firm's partner compensation system? In recent years, more and more firms are acknowledging the important of partners' intangibles and are finding a place for it in their partner compensation systems. But they struggle with how to measure and evaluate performance in intangible areas. It can be done; it just takes a little more work. For example, upward evaluations of partners by staff are a good way to measure the partners' impact on staff development. Formal written goal-setting programs are another way to measure intangibles.

I would love to hear how your firms recognize the value of partner intangibles. How do you factor intangibles into your partner compensation systems?

For the original post, read “Partner Intangibles.”

From The Marc Rosenberg Blog, blog.rosenbergassoc.com, August 2, 2011.