Partnership & Operating Model
How structure, authority and incentives shape behaviour
Strategy only works if the partnership and operating model support it. Ownership, governance and remuneration determine how a partnership actually functions: who has authority, how decisions are taken, and how partners are rewarded. These elements shape behaviour and signal what the firm values in practice.
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These issues become critical as firms grow, admit new equity partners, change leadership or move beyond founder-led structures. At that point, informal arrangements stop working. Partners need clarity on ownership, how equity changes over time, how decision rights are allocated, and how contribution is recognised and rewarded.
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The central challenge is alignment. Ownership, decision-making authority and remuneration must reinforce each other. When they do, decisions can be taken and carried through consistently. When they do not, execution slows and performance suffers.​
01
Ownership and equity.
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Ownership defines who holds equity, how careers progress over time, and how formal influence is distributed within the partnership. This includes partner entry into equity, equity bands and progression, capital contributions, valuation approaches, and arrangements for buy-in, buy-down and exit. Partners need a clear line of sight between firm growth and their own position over time if the model is to command confidence and support.
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In many firms, ownership structures have developed incrementally and become hard to manage. Simplifying equity classes, making capital rules explicit, and putting orderly entry and exit arrangements in place helps firms remain properly funded and reduces uncertainty as partners join, leave or retire.​
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The aim is a simple, transparent ownership model that partners understand and can rely on as the firm grows and leadership changes.
02
Decision-making & governance.
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Ownership defines formal rights and influence; decision-making determines how those rights are used. Decision-making sets out how authority is exercised in practice. It covers which decisions sit with partners, which are delegated to boards or management teams, how leadership roles operate, and how accountability is applied.
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This is particularly relevant for firms where decision-making has become slow or unclear, leadership roles are under strain, or informal arrangements no longer work as the firm grows.
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As firms grow, informal or consensus-based decision-making often becomes slow and unpredictable. Clear decision rights, defined leadership roles and agreed escalation routes allow firms to move more quickly while preserving partner engagement and confidence.
Good decision-making reduces uncertainty and internal politics, allowing partners to focus on clients, leadership and performance rather than process.
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03
Remuneration and partner contribution.
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Partner remuneration is where ownership, authority and decision-making are experienced most directly. It signals what the firm values, shapes behaviour, and determines whether partners regard the system as fair and credible. When remuneration does not work well, trust and alignment weaken quickly.
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This work is typically relevant for firms facing uneven partner performance, tension around contribution and reward, or concerns that the remuneration system no longer supports strategy or collaboration.
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Effective remuneration systems make expectations explicit and link reward to contribution. Financial performance is central, but it is not sufficient on its own. Leadership roles, collaboration, responsibility for key clients, pricing and realisation discipline, and institutional contribution all need to be recognised if the system is to support the firm’s strategy in practice.
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Contribution must therefore be clearly defined and consistently assessed. Partners need to understand how differences in performance are evaluated, how those differences affect profit allocation, and how decisions are made. Transparent process and reliable data are essential. They reduce ambiguity, limit politicisation, and help partners accept outcomes even where rewards differ.
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No remuneration system is, therefore, static. As firms grow, strategies change, and generations pass from one to another - remuneration models need to evolve. Change is most effective when taken in steps, with continuity of guiding principles. The objective is not to find a perfect model, but to operate a system that partners support, that reflects partner’s financial aspirations and culture, and that can adapt over time without reopening fundamental arguments.
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04
Succession and long-term stability.
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Across ownership, decision-making and remuneration, the underlying objective is long-term value creation and stability. This includes leadership transition, retirement and exit arrangements, and managing inter-generational change in a way that feels fair to both current and future partners.
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When these elements are aligned, firms rely less on personalities and informal arrangements, and agreed rules and consistent decisions.
Clear leadership roles matter because they make it obvious who decides what, and prevent the same issues being debated again and again. Leadership roles and responsibilities are clearly defined, including the Managing Partner, board or management committee, and the decisions that are reserved to each.
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Related thinking can be found in our Insights.
05
Operating model.
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This work is typically relevant for firms experiencing margin pressure, inconsistent pricing or realisation, or limited visibility over what is driving performance across matters, clients and practices.​ Many law firms continue to grow, but growth is increasingly accompanied by pressure on margin as the internal cost of delivery rises. ​
Organisation is therefore a strategic choice. Decisions about practices, sectors, offices and client teams determine how work flows through the firm and what resources are required to support it. This increasingly includes greater reliance on business professionals in areas such as pricing, finance, operations, technology and client development, reflecting the complexity of delivery and the need to support partners effectively. These organisational choices shape both the cost of delivery and the firm’s ability to serve clients consistently as it grows.
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The operating model gives effect to these organisational choices. It defines how work is priced, staffed and delegated, how leverage is used, and how legal and business professionals work together in delivery. Where the operating model is coherent, performance is repeatable, and cost is understood. Where it is not, delivery depends on individual judgement and the margin erodes over time.
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Technology and AI add value where they support the operating model and enable consistent ways of working, rather than introducing parallel processes.
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Where organisation, delivery and information are misaligned, even well-designed governance structures struggle to function. Reliable information at matter, client and practice level allows leaders to allocate resources, make investment choices and adjust direction with confidence.
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