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Brainard - Notes & Role Play

This case involves issues around compensating partners at law, accounting, consulting and other professional firms. It discusses balancing seniority-based and performance-based compensation, weighing factors like origination fees and risky new business lines. A central dilemma is weighing short-term versus long-term contributions, especially of founders. Performance schemes involve judgment calls, creating ambiguity. Partners must reach consensus after communication. Hiring outsiders complicates compensation structures. Key characters face these issues, like rewarding a partner's uncertain new line versus an experienced partner billing fewer hours.

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217 views2 pages

Brainard - Notes & Role Play

This case involves issues around compensating partners at law, accounting, consulting and other professional firms. It discusses balancing seniority-based and performance-based compensation, weighing factors like origination fees and risky new business lines. A central dilemma is weighing short-term versus long-term contributions, especially of founders. Performance schemes involve judgment calls, creating ambiguity. Partners must reach consensus after communication. Hiring outsiders complicates compensation structures. Key characters face these issues, like rewarding a partner's uncertain new line versus an experienced partner billing fewer hours.

Uploaded by

somu9006
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOC, PDF, TXT or read online on Scribd
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Brainard, Bennis, and Farrell

This case raises a number of issues in connection with compensating partners in law firms and
more generally in partnerships such as accounting firms, consulting firms, etc.
1. The trade off between seniority- and performance-based rewards, or perhaps better put,
between rewarding past contribution, if it was good, versus current contribution.
2. If performance-based pay is stressed, then one needs to figure out how to weigh the
various factors, such as
a. origination fees, should they be shared, for how long should they be given, etc.
b. partners who start new and potentially risky business that yet have to make any
earnings
c. those partners who work in lines that may be important to the firm, in terms of
their entire portefolio, but that do not make big profits
3. The central dilemma is to figure out to weigh short- versus long-term contribution,
especially the contributions of founders and those that built up a firm but that no longer
need be major contributors.
4. Most performance-based pay schemes involve judgement and case-to-case calls. Rarely
is there a straight application of a formula. This creates dilemmas, about ambiguity of
reward structure, etc.
5. All of above need to be communicated to partners. Then consensus needs to be reached.
6. Hiring from the outside into partnership positions creates special problems. In order to
be competitive and succeed on might have to offer very good deals. This may upset the
internal compensation structure of the firm.
The central characters in the case are:
Richard Kincaid, the chair of the executive committee: He faces the problem of figuring
out how to adjudicate between the various demands from the partners, the old versus the
young guard.
Paul Piccoli, a partner: He has started a new line of work and the concern is how to reward
him when it has yet to bring in any profits and its prospects are uncertain.
Paula O'Brien, a partner hired in from the outside: To attract her, to be competitive, in a
field the firm needed representation, it had to give her a better deal than what other partners
her age received.
Jason Cesario, partner, tax law: He is the best tax lawyer in the firm. He is more productive
than anyone else and gets the work done in less time. He therefore bills fewer hours for the
same job and may appear to be less productive. He cannot be used for generating business
because he is not presentable to customers.
Thornton Grey, a partner with long seniority (age 62): He bills fewer hours than most
partners (in one year only 800) and brings in very little new business. At the same time he
draws a very large compensation. This creates resentment among especially the younger
partners.

ROLE PLAY
Case: Brainard, Bennis, and Farrell
RE: On presentation of case
There will be altogether 7 different groups when discussion the case, at least one for each of the
parties identified below. I will call on these when discussing the case.
Please split into groups of 5-8 students.
Groups 1-5 should represent one the following parties in the case:
This gives the following.
Group 1 represents Kincaid.
Group 2 represents Piccoli.
Group 3 represents O'Brien.
Group 4 represents Cesario.
Group 5 represents Grey.
Each of groups 1-5 should prepare what they view to be the best position of the party they
represent as well as views on what the other parties should get.
Group 6 should represent an outside consulting agency giving advice on how to solve the
compensation problem.
Group 7 should analyze the case from the viewpoint of an academic, relating it to the readings in
the class.

I will ask questions to each group and ask for responses from the other groups.
Each group needs to meet prior to the case being presented. You then agree on what your
view will be. That view is to be presented in class. I will pick, during class, one member
from each group to present their view.
There may be more than one group representing each character in the case.
During the class we will engage in some role play around the case.

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