Having worked with small and mid-sized law firms over the last 15 years, I have had the opportunity to see many different compensation models. Just as each firm was unique, so were their compensation plans. It seemed the goal was to make sure their compensation model was not like anyone else’s especially the firm they had just left.
Most of the models have similar problems. My next few posts will review the most common mistakes.
Mistake number one -> failing to align compensation with firm goals
“The odds of hitting your target go up dramatically when you aim for it.” ~Mal Pancoast
Compensation systems should support the goals the firm is aiming to achieve over the next few years. If your firm is trying to build a new practice area, check that your compensation plan supports that goal. If your firm is trying to bring new clients, reward for it.
I discuss this a lot when working with firms and strategic planning. People tend to find it easier to solve the “hows” – how to do something, before they have defined the “whats” – what they are trying to achieve. It’s easy to miss target when you aren’t aiming for it.
This leads to the second mistake; never changing the compensation plan. And I have to ask REALLY? Don’t the firm’s goals ever change? You will have a higher success rate of hitting the target if you change your reward system so it aims for it. Bulls eye!