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A lot goes into that analysis. Is your firm transparent with overhead expenses ? Do you know what firm “assets” where utilized to help you develop, Bill and collect? Those are all factors. Generally, think in terms of “the rule of 3rds” with the last 3rd split between you and the firm depending on the above factors. For example (let’s just say 2.1 for simplicity sake) your base should be 700K, 700K goes to the house and you divide the remaining 3rd between the firm and you depending on what firm resources were instrumental for you to develop, Bill and collect the money.
If your firm is not transparent or gives you a run around and not at least the line items involved in overhead , assess the portability of your 2.2 book and decide whether you want to leave or stay. Either way, it determines your ability to negotiate
Depending on how experienced you are, that is a solid book.
P4, excellent analysis.
OP the problem with a book on this is that these issues are extremely fact specific.
I’m interested in this question as well.
me too
What were your personal collections? And what’s your overhead allocation?
My expenses for my team working on the book is about 450K. I need to figure out how much I billed I don't have those numbers.
Are you full equity or partial or non-equity
If that book is portable you can lateral with it to an equity position at a lot of firms including Amlaw 100. You definitely ought to be pushing for equity where you are and looking at options if they won't.
As a general rule, we pay 25% of collections on work originated.
We use it to set comp at the beginning of the year. If it becomes clear during the year that a partner's performance is significantly exceeding the partner's budgeted revenues, we may pay a bonus. Otherwise, it's factored into the next year's comp for that partner.
Did you share originations with anyone on the 2.2 such that they are being bonuses based on their share?
Thanks! Fair point.
For an easy rule of thumb 1/4 - 1/3 of collections on your originations for base. In actuality, the calculation is much more complicated depending on your partnership structure.