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Under current law, compensation paid to the employees of a tax-exempt organization is not subject to excess remuneration rules as it would be for a similar for-profit organization. Under the Tax Cut and Jobs Act, should certain employees of a tax-exempt organization receive compensation greater than $1,000,000 during the tax year from any combination of a tax-exempt organization and/or its related organizations, the organizations would be subject to an excise tax on that employee’s compensation in proportion to their payments to the employee. This rule applies to the five highest compensated employees of the tax-exempt organization with compensation greater than $1,000,000 for the taxable year, as well as any other employee with compensation greater than $1,000,000 who was formerly classified within the “five highest compensated employees” during any taxable year beginning after Dec. 31, 2016 (§4960 of the Code).
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Retirement Succession Can Hedge Against Lateral Partner Acquisition Risks
By David Wood
While growing by acquiring lateral partners and practice groups can be lucrative, it carries many risks. Lateral candidates’ projections of the revenue they will bring to a new firm can prove inaccurate, or a particular candidate may simply be a bad fit culturally.
The Impact of Gen X and Millennial Law Firm Leaders
By Marci Taylor
Generation X lawyers stand poised to wield considerable influence. Often the unsung heroes in discussions about generational dynamics, Gen X professionals bring a wealth of strengths to law firm leadership. Their pragmatic outlook, honed by navigating shifts in technology and societal changes, positions them as adaptable leaders.
It’s Time for Lawyers to Return to the Office 5 Days a Week
By J. Mark Santiago
It’s time for attorneys to return to the office on a five day a week schedule. There is significant evidence that shows remote learning is not as effective as in-person instruction.
Law Firms Eager to Increase Nonequity Tiers
By Andrew Maloney
Last year saw a ”staggering” jump in the number of law firm leaders who said they wanted to increase their nonequity tier going forward. Now it’s clear many of the biggest Big Law players are following through, with several Am Law 100 firms growing their income partner ranks by double-digit percentages in 2023.
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