MP or Rainmaker: who should earn more?

That depends.

For those of you hooked by the title of this blog, I’m sorry to disappoint you with that answer.  In allocating partner income, a firm needs to look at all performance attributes of each partner.  From a 35,000 foot altitude, firms should be reviewing these items for each partner:

1.     The partner’s role in the firm, the relative values of the various roles (MP, rainmaker, client handler, QC expert, niche specialist, administration, etc.) and how well the role was performed.

2.     The extent to which the partner achieved his/her goals.

Most partners in a firm are client handlers.  Their roles call for excellence in leadership, bringing in business, retaining and profitably growing a client base, helping staff grow, teamwork, interpersonal skills and being a good corporate citizen. 

The MP’s role requires a different focus, including  profitability, execution of the strategic plan, holding partners accountable, effective firm governance, overseeing revenue growth, making the firm a great place to work, crisp decision-making and effective succession planning.

Consider the case of a new MP who is relatively young, and his/her comp is 30% below the highest earner before being elevated to MP.  It would be highly unlikely that the newly promoted MP could justify being the highest paid partner in his/her first few years as partner.  But not many would argue that if this new MP makes a significant, positive impact on the firm’s growth, profitability and overall success, he/she would be entitled to above-average comp increases, thereby closing the gap on that 30% pay differential.

Now consider the rainmaker.  For as long I can remember, rainmaking usually trumps all other performance attributes when it comes to compensation.  But I’ve seen many rainmakers perform poorly in other important areas such as growing the staff, billing and collection, teamwork and accountability.  These need to be taken into account.

It’s not enough to ask which of the two positions should be the highest paid.  Firms need to look at (a) how well they performed these roles and (b) the whole package of performance factors, not just one or two.