How Roger E. Barton developed a more transparent compensation system
Published in 2019 New York Metro Super Lawyers magazine on October 2, 2019
There was no aha moment. Though he once worked for a big law firm, he doesn’t recall reflecting on it much after he stepped away in 1991. The epiphany came slowly.
“A general counsel once told me, ‘The BigLaw system is broken,’” Roger E. Barton recalls. “‘Where are the loyalties? Are the loyalties to try to get as much money out of a client as you possibly can so the firm is profitable, or is your loyalty to do what’s right for that client and establish a long-term relationship?’ They told me, ‘You know, it takes a very strong partner to have more loyalty to the client than you have to your other partners.’”
That’s why, when he started expanding Barton LLP in 2011, his goal was to establish a firm model that better supports those client-loyal partners. The firm started with seven attorneys; it now has 36.
“You really have a stake in running a practice,” says Barton of his firm model. “You have a stake in the financial outcome of your practice; you have much more autonomy. You become a true owner/partner, as opposed to a meaningless vote in a large partnership structure.”
The cornerstones of the firm’s system, which the partners dub “Better Law,” are financial partnership and flat management. Compensation is the same across the board, and benefits those who bring the client on board as well as those who do the work, which Barton says creates collaboration and accountability. Transparency is also key. “Every partner here knows how every other partner is paid,” he says. “Every partner knows exactly what they need to do—how their money is earned. There’s no black box of points or shares at a compensation committee.
“All, or almost all, BigLaw firms are still managed by an executive committee and use a compensation committee to evaluate partner compensation,” he adds. “Those at the top of the compensation structure are generally the same people making decisions. The system works for them, and they have little to no incentive to change.”
Barton’s firm has low overhead and even lower bureaucracy, he says, “so we can be very nimble and responsive to our clients. It can be nimble internally in terms of management, but also in providing clients alternative fees and being competitive in the marketplace.” He adds: “The overall cost of the work is lower, the quality is higher, and the client’s experience is better because they’re working directly with a partner.”
He says the system works best for partners with an annual book of business between $1 million and $3 million—the kind who aren’t in the top echelon at BigLaw and have rate-sensitive clients.
Barton attorneys have less pressure to bill and make more money, he says. “They’ve got a direct tie-in to how much they earn based on their productivity. So if they want to earn more and put that pressure on themselves, they do that. If they are at a level which is comfortable for them, then they’re not going to have the pressure of having to bill more and more.”
Though the firm continues to grow, Barton says it won’t ever become big enough to be BigLaw. “I don’t know if what you get at 200 [attorneys] is any different from if you have the right 50,” he says. “You’re kind of chasing numbers. Why do you need 200 when you might as well be 400? If you’re 400, you might as well be 800. For the work that we are looking to get and have, we’ve got sufficient resources to service it.”
By the Numbers: BigLaw Compensation
- The average compensation for equity partners is three times greater than nonequity partners ($1,136,000 vs. $371,000), while the hourly billing rate is much closer ($775 vs. $599).
- The average hourly billing rate for all partners is $718, up 5% from 2016. All major cities reported an increase in billing rates. The highest rates are in New York ($994).
- In closed compensation systems, 69% of partners would like to see systematic change.
—Source: Major, Lindsey & Africa 2018 Partner Compensation Survey; more than 1,200 partners from Am Law 200, NLJ 350, or Global 100 firms responded