Look carefully at your compensation system. Are you rewarding those efforts that will ensure the long and short-term viability of the firm? What are you rewarding? A Lexis Managing Partner Forum Survey ranked the most and least important factors in partner compensation.
The results are as follows:
- The top factor in partner compensation is working lawyer fees received (at 30%).
- In second place is origination credit (at 29%).
- Billable hours is in third spot (at 13%).
The bottom three factors (from the bottom up) are:
- Recruiting, mentoring and training associates (1%),
- Role in Firm governance (1%) and
- Teamwork and firm citizenship (3%).
Interesting, the survey found that Cross-Selling services was not taken into account at all in terms of partner compensation. Now – in a tough economy, cross-selling services to existing clients is low-hanging fruit! Ask yourself why wouldn’t you reward lawyers for cross-selling!
It is oftentimes said that you get what you reward. Look at your compensation system – are you rewarding the right activities? Certainly no one would question rewarding billable hours and origination credits, but many firms have difficulties having their lawyers spend time on management tasks, on mentoring juniors and in participating in activities that will improve the productivity of the firm long term, such as building a good precedent database.
Take a hard look at your compensation system and see if it is aligned with your business goals – both short-term and long-term. Ensure that your future is being secured every day by rewarding the types of activities that will ensure progress towards long-term goals – that are in the best interests of the firm as a whole.