Portfolio
Mid-tier law firm
An innovative Australian law firm frustrated by the traditional partnership structure that dominates the industry, turned to Juno Partners to help them attract and retain top talent - and accelerate their growth - by taking a fresh look at rewards for senior staff.
Background
Our client, a rapidly growing Australian law firm pride themselves on their willingness to take on innovations and new technology to improve client outcomes in an industry that can sometimes be constrained by conservatism.
The problem
Within a short time of its founding, the firm quickly had more work than the two founding partners could manage. The traditional response to this pleasant problem is to appoint a new partner, but while their internal professional development program was producing candidates, they were not satisfied with the traditional partnership approach taken by most in the industry, for reasons including:
partnerships require new candidates to put in capital which they often do not have;
partnerships mean less time spent with clients and more time spent on partnership business;
partnerships mean all partners are exposed to the debts incurred by one; and
partnership structures eventually lead to enforced early retirement to allow space for new partners, pushing top earners out the door.
Recognising that these issues were faced by the vast majority of Australian law firms, they also sensed an opportunity. If an alternative approach could be developed, one that formulaically shared the success that the firm enjoyed but that addressed the issues noted above, it would make them not only more attractive to internal candidates, but to external candidates as well, ones that could bring an existing practice with them and further accelerate the firm’s growth.
The solution
Determined to avoid the complexities of a traditional partnership structure or of issuing equity in a holding company to key staff, Juno Partners was appointed to advise on developing an alternative way of rewarding the firm’s most senior personnel.
Working with the founders, we crafted a reward program for the firm’s Principals (equivalent to Partners in responsibility and earning potential, but without the legal complexities of partnership). The new approach allowed the two founders to retain 100% ownership of the firm, while transparently sharing with Principals the profitability of their practice and of the wider firm without upfront capital investment.
The Principal reward structure developed with the help of Juno Partners has now been in place for over eight years and has been a key driver of the firm’s on-going rapid growth.