For almost a century, we have found it most effective to delegate to a single Managing Partner considerable authority to manage the institution.  This includes strategic direction and expansion, internal business structure, and partner and associate compensation.  The Managing Partner is not selected through elections or any similar process, but rather by his/her predecessor.  Our view is that the outgoing Managing Partner is the person best placed to understand the skills and personality characteristics best suited to lead the Firm effectively at that time, and has no reason to allow anything but the future success of the Firm to influence the decision.  The fact that Jones Day has had only seven Managing Partners in the last 96 years is strong evidence that this approach has in fact worked the way it was intended to select the right person for the time; this continuity and stability has been an important element in Jones Day’s success over the years.

The Managing Partner serves at the pleasure of the partners, and is required to consult with various groups on a limited number of issues, but as a matter of tradition, good practice and respect, he or she will appropriately consult with a range of partners on any important matter.  Nevertheless, in the end the Managing Partner is the final decision-maker on virtually every matter of significance for the Firm.  This includes partner and associate compensation, annual budgets, conflict resolution, strategic direction and expansion, and internal structure.

This unusual scope of authority of our Managing Partner is frequently the focus of any discussion of governance at Jones Day with those outside the Firm.  But from our perspective, that is not the most important element of Firm governance at Jones Day; instead, it is the collective attitude, from those with administrative or management responsibility to the entire body of lawyers and staff, that respects and accepts the values and principles on which Firm governance is based.  The underlying assumption by all is that decisions are made in good faith, with the best information available, and in the best interest of the Firm.  There is, no doubt, a high level of trust involved; very few of our lawyers in the ordinary course would have occasion to have access to the full range of available information that should be considered in making any particular decision, so they rely instead on the judgment of the Managing Partner to make the best decisions possible.  The success of the Firm, and the fact that few who become Jones Day partners leave to move to a peer firm, is the best evidence that trust is well-placed.

As mentioned, Jones Day sees itself as a global legal institution, but because of its reliance on a set of values and principles to guide decision-making, it operates with a relatively small amount of internal organization.  There are only two standing Firm committees, and informal rather than formal procedures prevail for the resolution of internal issues of whatever type.  Our underlying assumption is that most talented lawyers want to serve clients effectively and appropriately, and will do so if not deterred or prevented.  In order not to interfere with this natural instinct, we do not recognize, for compensation or other purposes, concepts like origination credits or service credits or minimum billable hours targets.  We want and expect our lawyers to do the right thing in serving clients, whether that is referring the client to another lawyer in the Firm (or if necessary elsewhere) who is more suited to meeting the client’s needs, or responding without hesitation when asked by a colleague to help deal with a client or Firm issue.  In other words, we try our best to make sure that the Firm and its internal processes does not get in the way of lawyers serving clients effectively and efficiently.

In order to meet this objective, Jones Day has a single global partnership.  Every Jones Day partner is a partner; we do not have equity or non-equity partners, or international partners, or junior partners, or income partners, or contract partners – we just have partners.  All our partners have the obligation to contribute capital to the Firm; all our partners have a voting right that is determined by the relative amount of their compensation.  The income of the Firm is allocated among the partners annually, based on the Managing Partner’s perception of their relative contribution to the success of the Firm.  Our compensation system is confidential; only the Managing Partner and those small number of partners who advise him on compensation know anything about any other partner’s compensation.  Because of this, and because there is only one global profit pool, there is no disincentive for every lawyer to ensure that the appropriate lawyers, wherever located, are involved in every client matter.  This helps explain why Jones Day is always at the top of any client satisfaction survey – there is nothing in our governance or compensation system that deters or discourages our lawyers from living up to the fundamental values on which the Firm is based, and ensuring that they are providing the very best client service possible.  Indeed, the internal reputation and performance of our lawyers in doing so is an important element in evaluating each lawyer’s relative contribution to the results of the Firm.