Should Law Firm Leaders Get CEO Pay?
At a time when major law firms are increasingly like the big corporations that they represent as clients, there’s still one noteworthy difference between the two: The individuals in charge of managing big corporations are paid considerably more.
While there is some pressure for law firms to up the ante for their managing partners, the consensus appears to be that those in charge of law firms should not be paid at the same level as their corporate counterparts, according to a New York Lawyer (reg. req.) reprint of a National Law Journal article.
Few eyebrows are raised, these days, by a seven-figure salary paid to the chief executive officer of a BigLaw firm. But a salary demand for $5 million, for instance, by the chair of Orrick, Herrington & Sutcliffe reportedly was a key factor in the termination of merger discussions between his firm and Dewey Ballantine earlier this year, the article says.
Corporate CEOs earned a median $2.3 million in 2003, and doubled that annual salary with another $2.3 million or so in stock options, according to the Knight Ridder news service.
“A managing partner or firm chair whose compensation gets too far out in front of his or her partners is just painting a big target on their back. They’re asking for trouble,” Richard Gary, a former managing partner of Thelen Reid & Priest who now works as a California-based consultant, tells the National Law Journal. “Even though those jobs require far more management and leadership expertise, it’s a real stretch to get law firm partners to agree with that proposition.”
