March 19, 2005
What is leverage?
Leverage refers to the use of non-equity partners fee earners, usually associates and paralegals, to expand the capability of the firm and increase the personal income that can be earned by the equity partners. Without leverage, a Partner’s income is limited to what the partner can bill for his or her own work. Leverage is achieved by using non partner fee earners working under the Partner’s supervision. A partner and three associates, for example, can do more work and generate more fees than the Partner alone. Leverage is normally expressed as a ratio– for example, if there are three associates or paralegals for each Partner, the ratio is 3 to 1.
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Filed under Law Firm Bus Model by Tom Collins