June 15, 2005
Relative Deprivation
As I worked with law firms over the years, I came to understand that, from the time each was born, they carried within them the seeds of their own destruction—“the compensation plan". It’s not the dollars received by each partner, but “Relative Deprivation” that does the nasty work. It is the issue of “my compensation” related to “your compensation” that is the issue. You are getting too much or I’m getting too little.
A lot has been written about getting compensation plans right, but relative deprivation will always be around no matter how right you get the compensation plan. So keep working at it, but there are other places to look to find the answer to keeping the family of partners happy. Well, maybe not happy, but together.
The first step is to put the concept of “Relative Deprivation” out in the open. Partners are adults. They need to understand it is natural to feel they deserve more and/or that someone else deserves less. For that lawyer, there is someone else who feels the same about him or her, i.e., he/she deserve less and they, more. No one has an exclusive on Relative Deprivation. Relative Deprivation is not healthy for the individual or the firm. It is healthy to actively work for a fairer compensation plan or to pursue how you can make more by contributing more. But every individual needs to understand that even if their compensation doubled or tripled over night, the feeling of Relative Deprivation would still be at play. It is natural. Don’t let it become destructive. If an individual understands it and understands that others will recognize it when exhibited, its negative impact is reduced.
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Filed under Compensation, Firm Culture by Tom Collins