(Reuters) - Boies Schiller Flexner partners on Saturday voted to revamp their compensation system, moving from an eat-what-you-kill system to one that better rewards non-billable contributions and teamwork, firm leaders said.

The firm's 100 partners met for six hours via Zoom before overwhelmingly voting in favor of the new plan, co-managing partners Natasha Harrison and Nick Gravante told me in an exclusive interview. The new system will make partner paychecks more predictable as well as give the firm more flexibility to compensate key partners and rising stars.

"This is a historic moment for the firm," Harrison said, adding that setting compensation is among "the most important, significant decisions taken as a partnership."

It's also a lot easier to change how you divide the pie if the pie is growing—and Boies Schiller partners have every reason to be optimistic right now. After seven years of work—and $40 million in out-of-pocket expenses, never mind time billed—Boies Schiller and co-lead counsel Hausfeld reached a tentative $2.7 billion settlement with the Blue Cross Blue Shield Association in a massive antitrust class action.

David Boies, who led the firm's team, said the representation is on a contingency basis, and that no litigation funders hold a stake.

(Cue the "Happy days are here again" dance.)

I admit, I'd been a bit worried about Boies Schiller of late. Starting in 2018, Boies—perhaps the most prominent litigator in the United States—faced blistering criticism for his work on behalf of Harvey Weinstein and failed blood-testing company Theranos.

Since December, the firm has lost more than 30 partners, including executive committee members Bill Isaacson and Karen Dunn, who moved to Paul, Weiss, Rifkind, Wharton & Garrison in June. Dunn declined comment. Isaacson did not immediately respond to a request for comment.

Without naming names, Boies admitted to me that "two or three partners left because of massively larger compensation offers." But he said that the other departure fell primarily into three categories: First, the ones that the firm "started counseling out two years ago. This category represents the largest group of departures."

Second were departures related to the firm's "failed acquisition" in California with Caldwell Leslie & Proctor in 2017, which Boies called "a bad fit."

And third, "a few left because of the new leadership changes. They were not picked to lead and so they decided to leave."

Still, any time dozens of partners walk out the door, it can create a worrying perception both inside the firm and out. (Think Howrey, which collapsed in 2011 after hemorrhaging partners.)

The timing of the Blue Cross settlement, which still must be approved by the judge and the Blue Cross Blue Shield member companies, and the compensation reorganization are fortuitous—though Harrison and Gravante say the new plan is not a direct response to any departures and was in the works for months.

The firm's old compensation system was based on an objective formula that included credit for hours billed, collections, business generated and responsibility for overseeing client matters.

It worked well in the early days of the firm, Boies said, when virtually all of the business was generated by himself, Jonathan Schiller and Donald Flexner.

But at this point, Boies and Schiller account for about 20% of business (Flexner is retired). "The compensation system really didn't adjust sufficiently to the changed nature of the firm," Boies said. "The formula wasn't adequately rewarding or incentivizing team collaboration."

Nor did it "take into account contributions that partners made to firm leadership and management," he continued. When he and Schiller ran the firm, "that wasn't important," he said. But now that the next generation of partners has taken the reins, it's necessary to credit those lawyers for the work, as well as recognizing efforts at recruiting and promoting diversity.

Moreover, while about 75% of the firm's work is for institutional clients such as Barclays and DuPont, the rest is contingency. For partners working those cases, compensation tended to be feast or famine—not ideal for financial planning, Gravante said. "People have kids to put through school, mortgages to pay."

The new plan assigns partners at the beginning of each year to a tier or band based on their track record and what's on their plate going forward. Within the band is a range of compensation—say $2 million to $2.5 million—based on the firm's projected performance. For equity partners, the tiers will mirror the firm's overall profitability.

The new system provides greater certainty in compensation, Gravante said, as well as aligning everyone's interests to make sure the firm hits its goals. "We're all in it together," he said.

Harrison added that partners will "be able to move more nimbly up and down the bands."

"What the firm is doing now--transitioning from its founders to the next generation of leadership--is hard work, exciting but hard work just the same," she continued. "There are considerable challenges to be managed and it requires a leading strategy, which we have, and an abundance of patience and fortitude."