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1. When a Partner performs work for a client that she herself originated, that attorney will keep 70% of all collections. For example, if a Partner’s work for her originated client results in $1,000,000 in collections during a given year, $700,000 would be added to her compensation account.
Attorneys at Rimon retain 70% of revenues generated by the firm. We employ a purely objective compensation structure, which leaves no room for politics or bureaucracy.
2. If that Partner then works for a client originated by another Rimon attorney, the Partner will receive 100% of her “Internal Rate.” A Partner’s Internal Rate is the rate a Partner receives for work performed for clients that the Partner did not originate. Each Partner sets her own Internal Rate. For example, if the Partner has decided on an Internal Rate of $250 per hour and she bills and collects on 400 hours of work that was cross-sold to her, $100,000 would be added to her compensation account. The rate can be changed for future work but not for work in progress.
3. If the Partner also originates a client that is serviced by other attorneys, she will receive the difference between 70% of the amount collected from the client and the “Internal Rates” of the attorneys doing the work. For example, suppose the Partner cross-sells work to another Partner whose Internal Rate is $250 per hour, and the hourly rate charged to the client is $700 an hour. If 1,000 hours were billed and collected from the client, the payout would be as follows:
Each Rimon partner takes home the sum of the three calculations above, every month. Or put simply, they keep: a) 70% of what they collect from clients they originate, minus b) the internal rates of others who did work for their originated clients, plus c) their own internal rate for work they did for clients they did not originate. In the example above, the attorney would take home a total of $1,040,000.
Partners get paid in full every month purely based on the total of the three factors above. The firm does not borrow from Partners or force them to buy-in.
A group of attorneys may decide to pool their totals together, for a variety of reasons. Some of the attorneys may be associates or salaried service partners, or a group of partners may simply want to share in their collections together to smooth out their compensation. Such a group can simply aggregate their earnings, according to the same calculations above, and choose how to split the pot between the members. For example, if a group of two partners and three associates brings a total of $5,000,000 in collections to the firm, all from work originated and performed within the group, then the group would earn a total of $3,500,000. The group can direct the firm how those earnings should be divided between them. If they so choose, the Partners can give each associate a salary from that $3,500,000 and then split whatever remains among the partners. Or they may choose to split it a different way. This allows for more flexibility and custom compensation models within the firm.
1. The firm does not need to set minimum hourly requirements or fee structures. Rimon partners are highly incentivized to build their book of business because they enjoy the appropriate reward for bringing in clients and making internal referrals. There is no conflict of interest between the attorneys and the firm; everyone’s incentives are perfectly aligned.
2. The firm is more collegial. Rimon partners return calls, provide an excellent product, and prioritize the client because they are netting a rate that they themselves have determined will be appropriate for their efforts.
3. The clients will receive better service and better value from every attorney at Rimon. The attorneys have the right incentives, through both external rates and internal rates, to keep the client happy.
4. Attorneys can tailor representations to their clients’ needs. Originators can set alternative fee structures and bring in the attorneys they want, without requesting permission or receiving any pressure from the firm. In the case of alternative billing structures, originators are free to work with attorneys on their team to decide how the 70% is allocated.
5. Rimon can operate under a dynamic and flexible spherical structure rather than a hierarchy since everyone’s incentives are aligned and compensation is purely objective. There is no room for politics or gaming the system.
