A million dollars a year is no longer enough

By Neasa MacErlean

11 February 2015 at 09:46 BST

Former Jones Day partner Mark Hermann is predicting problems for the rich law firms whose partners earn US$1m a head - as they fall behind the super-rich where earnings are around $3m.

A million dollars a year is no longer enough max sattana

Mr Hermann is now global chief compliance officer and chief counsel for litigation at insurer Aon. He believes that the super rich practices - especially those which excel in capital markets - will increasingly pull away from the ordinarily rich. 

Discarding the older folks

He outlines the way in which the firms which are afraid of failing behind are already taking some emergency measures to keep up. He wrote in Above the Law: 'This goes beyond merely closing off the partnership ranks to newcomers and discarding the older folks who don’t attract enough business. Firms have started to reduce (or delay) contributions to pension plans, delay payments to lawyers and creditors, accelerate income, and otherwise use financial engineering to boost PPP[profits per partner]. Ultimately, however, you can eliminate a pension plan or postpone the payment of bonuses only so many times; eventually, you run out of one-time fixes.' 


The risk they run is that of not being able to offer enough pay to recruit the best talent. He suggests an alternative route: 'Use a glue other than money to hold your joint together.' Although he does not name Slaughter and May, he points at the kind of firm which, like Slaughters, has a strong sense of collegiality. Source: ABA


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