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Smart business leaders compete by constantly seeking cost advantages. Yet law firm leaders compete by perpetually increasing associate compensation. As always, this will not end well.
The earnest and breathless headlines always have the air of triumph: "Mega law firm announces market-leading associate bonuses" and "Monster Law matches Mega Law" and sometimes even "Humongous Law outbids Mega Law in the war for talent" Of course there's always a contrarian in the group, a managing partner who, as if watching with amusement as his peers engage in adolescent hijinks, claims to be immune to such frivolity, and unironically announces a 95% match to the market lemmings, er, leaders. Whether associate salaries or year-end bonuses, law firm leaders are perpetually increasing their cost base and impairing profits to achieve … what? Why do law firm leaders continually pursue a strategy that is so obviously harmful to the bottom line?
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