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<blockquote data-quote="JohanGRK" data-source="post: 27080" data-attributes="member: 5385">I always assumed that low-leverage (i.e. fewer associates for each partner) was the more profitable model because it:a) cut down on the biggest source of costs for a law firm (its labour) andb) resulted in trainees/associates being overworked (given the need to cover more junior tasks in addition to their regular workload) but without necessarily seeing a proportionate increase in pay, with the surplus going to the partnership.But, obviously, if some of the equity partners aren't pulling their weight, then it might be best to move to a higher-leverage model where they're cut out and the same level of profit is spread out between fewer partners (resulting in a higher PEP)Then there are also the indirect effects of either structure - it's not good to overwork your lawyers, it's good to have lots of (senior) associates to do work that partners' time is too valuable for, etc., and all of these may result in higher profitability for a firm that has adopted the higher-leverage model over timeInterested in what others think <img src="data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7" class="smilie smilie--sprite smilie--sprite1" alt=":)" title="Smile&nbsp; &nbsp; :)" loading="lazy" data-shortname=":)" /> I feel like I'm theorising at this point</blockquote>

[QUOTE="JohanGRK, post: 27080, member: 5385"] I always assumed that low-leverage (i.e. fewer associates for each partner) was the more profitable model because it: a) cut down on the biggest source of costs for a law firm (its labour) and b) resulted in trainees/associates being overworked (given the need to cover more junior tasks in addition to their regular workload) but without necessarily seeing a proportionate increase in pay, with the surplus going to the partnership. But, obviously, if some of the equity partners aren't pulling their weight, then it might be best to move to a higher-leverage model where they're cut out and the same level of profit is spread out between fewer partners (resulting in a higher PEP) Then there are also the indirect effects of either structure - it's not good to overwork your lawyers, it's good to have lots of (senior) associates to do work that partners' time is too valuable for, etc., and all of these may result in higher profitability for a firm that has adopted the higher-leverage model over time Interested in what others think :) I feel like I'm theorising at this point [/QUOTE]

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