I have often written on the tension between
lockstep compensation and eat-what-you-kill, and I’m coming to
the view that a nuanced, subjective, and openly ad hoc approach
is probably the best, all things considered. Each of the
polar end-points on that spectrum has deep flaws. (Except,
of course, when they don’t—lockstep works wonders for the
creme de la creme of New York including Cleary-Gottlieb, Davis-Polk,
and Simpson-Thacher, whereas eat-what-you-kill has brought Greenberg-Traurig
from a nice little Florida firm to #20 on the AmLaw 100 in the
space of a decade.)
But here’s something entirely different to consider: What
if legal regulation pulls the lockstep chess-piece off the board
entirely?
Here in the states, the seminal case is EEOC
vs. Sidley-Austin, 315 F.3rd 696 (7th Cir. 2002), in which,
as you probably know, Judge Richard Posner concluded that Sidley’s
"partners" were not necessarily that given the intense centralization
of power prescribed by the partnership agreement, and that they
could be deemed for purposes of federal antidiscrimination law,
"employees."
Now, in the UK, the EC plans to impose new regulations next
year that could likewise threaten
lockstep.
Given that partnership compensation structures are just about
the single most important tool management has available in its
kit, wouldn’t it be nice to be treated as responsible adults
presumably capable of making intelligent decisions in your own
best interest, and not have a key tool confiscated? But
I editorialize.
