It has been reported that Paul Weiss Rifkind Wharton & Garrison has moved to a ‘black box’ style profit sharing system. A black box system allows the firm to allocate profits between partners confidentially. In short, no-one knows what anyone else is being paid.
In many ways, the appeal is obvious. A black box approach addresses the inevitable comparisons that partners draw between themselves. These comparisons can be divisive and distract from client service. In the case of lateral hires, who are often rewarded handsomely at the outset to lure them from their previous firm, comparisons can impede their effective integration into the firm.
