Memo

To: Mr. Richard Kincaid

From: XYZ (Executive Assistant)
Sub: Compensation system to be adopted
Date: 4th December 1995
This is in reference to your request regarding the compensation system that needs to be adopted in
Brainard, Bennis & Farrell going forward hence. I find that seniority-based compensation system as
an apt system to pursue going forward. The reasons for the same are as follows:

 The seniority-based system is in-line with our firms’ value of providing a harmonious
workplace for people who truly want to pursue law. This is also a point of differentiation that
our firm has in comparison to other corporate law firms, where people are judged based on
how much business they get to the firm
 Implementing a performance-based compensation system would mean that we must introduce
performance metrics on which we have to evaluate the performance of each partners. The
performance metric is a subjective figure. We have a lot of departments in our firms such as
corporate, litigation, real estate, tax etc. each department has different kind of work, so we
need to create different metrics for each of those departments that may bring prejudices and
may lead to one department getting more benefit than others
 Since our number of partners are increasing, it is difficult to keep a tab on number of actual
hours billed by each of these partners. There is some distrust in reporting of those figures. For
performance-based system billing hours will be a key factor along with the amount of
business that a partner gets. So, relying solely on these two metrics will increase the attrition
rate among our partners and will be detrimental to our firms’ brand
 The seniority system gives due diligence to the work done by our partners in the past. They
have brought the business to the firm and have developed a long-term relationship with the
clients which helps with the continuous flow of business to us
 The seniority-based system also keeps in check the kind of people that join the firm. This kind
of system will attract those people who want to practice law and can wait to reap their work
dividends at a later stage of their life
 The performance-based system will require a lot of data processing for which we need to have
a separate team of analysts analysing the data and then reporting the same to the
Compensation Committee
In my opinion, a seniority-based compensation system with a comprehensive billing system, a policy
on future lateral hires and an accurate system of origination credits allocation will prove to be best
way moving forward for the firm.