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The law firm of Brainard, Bennis & Farrell are discussing the splitting of partnership profits among its partners. During the discussion, some considerations were raised like seniority, performance, and lack of consensus when it comes to values. How should the partners handle the issue of seniority versus performance?
Harvard Business Review (495037-PDF-ENG)
February 03, 1995
Case questions answered:
- How much “performance variation” should we recognize in a single year in the case of Brainard, Bennis & Farrell?
- How do we handle the issue of seniority versus performance?
- How do we get “consensus”?
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Brainard, Bennis & Farrell (A) Case Answers
Introduction – Brainard, Bennis & Farrell
Brainard, Bennis & Farrell, a New York-based law firm, established its name over the years mostly through word-of-mouth referrals. At present, the firm has over a hundred officials and employees. Its services being offered ranges from tax services to cases of bankruptcy.
With such a diverse practice and large number of partners and employees, payment of services among the partners became an issue. The partners must discuss how payment should be distributed that would be fair for all partners and employees of the firm.
1. How much “performance variation” should we recognize in a single year?
It is indeed important to carefully evaluate the performance variation of an employee. However, the performance of the past cannot be a dominating factor in evaluating the current performance. However, this should also be done carefully as if you degrade your past star performer, his morale shall be impacted and might hamper his productivity.
From the given case, we can see that the firm was actually giving more value to the points each year apart from one or two instances. Therefore, we suggest that the firm fixes the compensation of its senior employees like Thorton Grey at a fixed value. This means imply that their share as a percentage of profits will not matter to the senior retired executives.
Even if the number of points that they might get will reduce each year but the monetary value should remain the same until he retires. This will give them a sense that Brainard, Bennis & Farrell, as a company, is not…
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