For those interested in the
details the formula would be:
|
Profits per partner attributable to a
matter |
= |
Profit (actual fees collected - direct
and allocable indirect expenses) Ö # Notional partners |
Number of
notional partners equals partner work on the matter (hours times standard
billing rates) as a percentage of total partner work for the firm, times the
total number of partners.
Direct expenses for the matter
includes compensation and benefits of timekeepers on the matter (including an
assumed compensation for partners), allocated in proportion to the hours spent
on the matter vs. the timekeeperÕs
total hours for the year. Allocable indirect expenses include occupancy
expense, compensation and benefits of non-timekeeper staff, insurance, etc.
Allocation methods will vary based on the type of expense. The firmÕs software
handles all this.