Your group’s compensation formula may be its most jealously guarded sacred cow. Whether sensible or not, it continues in place as long as members don’t object. And your members will likely not object as long as the pot of available income keeps growing.
I expect and do see still more groups struggle over partner compensation. These five basic principles form the foundation of any income division format you design:
- Group members must trust the income division process and the people implementing it.
- The formula must be reasonably simple and clearly understood.
- The formula must provide some equity, although each member may not necessarily be treated equally.
- Proper incentive to work for the growth of the group as a whole promotes practice goals.
- The members must offer fair evaluations of each other and the practice’s needs.