Best Practice: Profit is up - why is partner compensation down?
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. We are a 7 attorney firm in Evansville, Indiana - four partners and three associates. I am one of the partners in the firm. Each month we are provided with a profit and loss statement, a billable hours report, fees received reports broken down by lawyer, and accounts receivable reports by lawyer. In 2014 our fee collections are up significantly over 2013 - our expenses are lower – profit is up - yet the money is not there for partner draws and we are having to draw less than we did in 2013? What do you think is happening?