Chapter 2

• chargeable hours


  these are the total number of hours that a partner incurred on client related assignments. weight may be given to hours in excess of a standard
• total billings


  the total amount build to clients for work performed and supervised by a partner constitute total billings. Weight maybe given to billings in excess to norm
• write-offs


  consists of uncollectible billings. Weight may be given to a write-off percentage 
• professional and civic activities


  time devoted to developing future business and enhancing the partnership name in the community is considered promotional and civic activity. Weight may be given to time spent in excess of a norm or to specific accomplishments resulting in new clients.
• profit in excess of specified levels


  designated partners commonly receive a certain percentage of profits in excess of a specified level of earnings
• the profits or losses shall be distributed in conformity with the agreement
• the partners may agree on any of the following scheme in distributing profits or losses:

  1. equally or in other agreed ratio
  2. based on partners capital contribution
  3. by allowing interest on partners capital and the balance in an agreed ratio
  4. by allowing salaries on partners and the balance in an agreed ratio
  5. by allowing bonus to the managing partner based on profit and the balance in an agreed ratio
  6. by allowing salaries, interest on partners capital, bonus to the managing partner and the balance in an agreed ratio
• 2. based on partners capital contributions:

  a ratio of original capital investments

  b ratio of capital balances at the beginning of the year

  c ratio of capital balances at the end of the year

  d ratio of average capital balances