Why Your Firm's Compensation Model Doesn't Reward Rainmakers

Law firm compensation is treated like a sacred text. Concealed. Composed of esoteric metrics. Concentrated at the top.

If you are a true rainmaker, meaning you originate meaningful work, grow it year over year, and expand relationships across practices, odds are you are being politely penalized by a system designed a century ago for a very different species of lawyer.

Let’s walk through the usual suspects.

The Traditional Buy In and Points Model

This is the cathedral model of law firm compensation. You buy in. You receive points or shares. You are told to be patient. Very patient.

Your ownership increases slowly. Painfully slowly. Often glacially slowly. And if you're a rainmaker, it is almost never proportional to the growth of your book.

If you double your book of business, your comp does not double. It inches. If you triple it, you are congratulated warmly and compensated modestly. The upside accrues to the Old Guard. The risk is quietly socialized. Your growth subsidizes their glide path.

This model is excellent for partners who already arrived a decade ago and are collecting as much as they can on their way out. It is terrible for partners who are still ascending.

The Biller Heavy or Working Partner Model

On paper, this one sounds fair. Bill more. Earn more.

In practice, it is a treadmill with a time clock. It rewards heroic hours, not scalable impact. Once your book exceeds your personal capacity to service it, the math turns against you.

You face an unappetizing choice. Either stop growing your book or work yourself into a professional pretzel trying to service it personally. Delegation becomes economically unrewarding. Cross selling offers more risk than reward. Origination becomes a hobby.

For rainmakers, this is the worst model of all. It actively discourages the very behavior that creates long term firm value and success in modern law firms.

The Siren Song of the Rainmaker Heavy Model

This one looks seductive. Big origination credits. Immediate increases when the book grows. It rewards origination heavily but treats those who bill the hours lightly, when it comes to compensation. Service partners and Of Counsel notice quickly when the economic pendulum swings too far. Resentment builds. Quietly at first. Then operationally. Responsiveness slows. Enthusiasm wanes. Client experience degrades.

You are paid handsomely to bring in the work. You are punished subtly when others do not feel invested in delivering the quality of service and legal product needed to ensure your clients remain yours.

High origination without cultural alignment is not a strategy. It is a short term sugar high.

The Alternative That Actually Works

Enter the ABC Formula.

Think of it as the Entrepreneur's Model. Origination still matters. But so does behavior. So does collaboration. So does leverage. There is usually a guaranteed base but everything else is clear, transparent and formula based. A = The amount paid to the Attorney Originator. Usually between 20 - 30% of collections as they are received. Thus, if they sent $500K of work to other attorneys, they would receive between $100 - $150K in income. No confusing metrics, no guess work. Straight forward and immediate rewards. B = The amount paid to the Billing Attorney. Usually between 30 - 50% of the hourly rate as collected. So if the hourly rate is $800 and the billing attorney services 1,500 hours, they receive $600K in income for that work. C = The amount paid if an attorney is both the Originator and Biller. This ranges anywhere from 67 - 80% of collections. For example, if an attorney has a $1.5M year and bills 1500 hours at $700 to do $1M themselves, they would receive somewhere between $670 - $800 for that work. On the remaining $500K sent to others, they would receive $100 - $150K. So under this platform, they would receive between $800 - $950K on $1.5M in collections.

The magic is not that rainmakers are rewarded. They should be. The magic is that cross selling is also rewarded so richly, and so transparently, that service partners become allies rather than disgruntled servants or even resentful adversaries.

Firms using true ABC models consistently outperform others in cross practice penetration. Not because they preach collaboration. Because they pay for it.

The key is discernment. Many firms claim to be ABC but most are just Eat What You Kill with little statistical evidence to support any other conclusion. The difference is visible in the data. EWYK firms don't collect and offer precise data on how much work is cross-sold. ABC firms live to talk about these numbers because they're so impressive. Partners may exaggerate or even lie about "We do a ton of cross-selling here!" but data is pure. Count on the data.

The Real Takeaway

Compensation models are not neutral. They shape behavior. They signal values. They reveal who the firm is really built to serve.

If you are a rainmaker building fast, scale matters. Incentives matter. Math matters.

And loyalty to a firm with a bad compensation model is not loyalty. It is inertia. Indecisiveness. Inability to make an entrepreneurial decision and move.

Choose accordingly.

Frederick Shelton is a consultant to lawyers on rainmaking, compensation models and career strategy. he can be reached at fs@sheltonsteele.com