Avoid losing your best lawyers due to compensation issues.©  

Lawyers must want to be your partners; they must volunteer their talents to your group; they must choose to stay with you. Lawyers need to look at your organization and desire to be where those ahead of them are now. One essential issue lawyers evaluate to make such choices is compensation. The goal is always to assure the lawyer believes that your organization is the best place for her to practice law at this time in her life. This boils down to W.C. Field’s admonishment: "Give the people what they want."

Much has been written about compensation systems in law firms and other organizations, focusing primarily on various compensation methods, criteria, record gathering and calculation. Generally, such authors admit that every compensation system is imperfect. The best compensation systems allow the individual lawyer some degree of control over his income, do not provide an absolute upper limit for any particular lawyer, and reward individual lawyers for what the lawyer views as superior performance. The best way to accomplish this in a firm setting is to have a "cafeteria compensation plan" giving several alternatives from which individual lawyers can choose.

Our lawyer interviews reveal that lawyers don’t work primarily for money. The motives that drive one to become a lawyer and to persevere in the practice are not financial. Compensation systems must take into account needs other than money, such as time, benefits, prestige, culture and so on.

When evaluating compensation, the lawyer’s decision to leave a practice is strongly influenced by four criteria: Fairness (i.e. "Is the system fair to me and everyone else, in my opinion?"); value (i.e. "Does the system value my contribution as I feel it should?"); the going rate (i.e. "Since I can definitely get more money somewhere else, what do I need to keep me from going?"); and control (i.e. "Can I control how much money I make, or is that decision out of my hands? Can I get what I ‘need’ here?").

Every change begins with a change in thinking. Initially, firms and their management need to reassess their current ideas. The idea that, in a large law firm or department, the individual lawyer is less important to the client and the organization, must be the first to go. Once management accepts that every lawyer is a capital asset, a source of revenue, and a profit center, the focus on retaining and caring for that asset becomes an elementary proposition.

If your systems are fair, if they properly value each lawyer’s contributions, meet the needs of the individual and allow the lawyer to control his compensation, you will not lose your best lawyers for compensation reasons. The goal is always to assure the lawyer believes that your organization is the best place for her to practice law at this time in her life.

Accept that lawyers are highly individual and have individual values, needs and goals. Open a dialogue; seek them out and tell them how valuable they are to your firm.

Ask: What are your compensation expectations this year? Why do you feel you should be compensated in this way? Is there any particular concern you have over your compensation? How can we structure your compensation in a way that is acceptable to you?

Listen. Create an environment where open and honest communication without fear can exist.

Hire a full time or consulting "retention director" who reports directly to top management and has the full support of the firm to design solutions to the lawyers’ perceived problems.

Act on what you learn. Make the changes that are requested, or expect the lawyer to leave in search of what he feels he needs. Do not leave these conversations believing that you have persuaded the recalcitrant lawyer to your point of view.

Never manage from the scarcity model. Do not explain how one "can only divide the pie so many ways," or "we can’t make everyone partner," or "there’s not enough money to do that." Instead, say "how can we accomplish what you want?" Raise the level of the water and all boats float. Manage from abundance.

Consider performance, not billed or reported time, and adjust compensation accordingly.

Be Flexible, Creative and Grateful. Remember when you really wanted to hire this lawyer? What are the things the firm is or should be grateful for about him? Any solution that saves the lawyer is worth considering. It’s probably worth doing, too.

©PeopleWealth January 1999