Tag Archives: incentives

Should You Go Long? Super Bowl Preparations & Superior Law Firm Performance

This season’s Super Bowl has already proved controversial.

The Super Bowl Committee is already warning fans that tailgating will not be tolerated at the New Jersey MetLife stadium in February. And, this will be the first Super Bowl in an outdoor stadium in cold weather in several decades.

Of course, snow is predicted.

But, as much as you prepare (or don’t prepare) for events like the Super Bowl, there are always unanticipated outcomes.

Take, for example, Super Bowl XLV held in Dallas, Texas. Jerry Jones, owner of the Dallas Cowboys, had almost four years to prepare, during which time he built a $1.2 billion stadium, complete with a closed roof.

Despite unexpected amounts of snow and sleet, transportation issues, and general chaos, the Packers and Steelers game went off without a hitch. Well, almost.

The Packers had fifteen players on the injured reserve list at game start and two more out by halftime. Nevertheless, with the leadership of Super Bowl MVP Aaron Rodgers, the Packers won.

Even more surprising than the events leading up to the Super Bowl is perhaps the events leading up to Aaron Rodgers’ position. Rodgers was attending Butte Community College when he had a lucky break—a Cal recruiter spotted him while recruiting one of Rodgers’ teammates. Rodgers was twenty-fourth in the 2005 draft, and sat for three years as Green Bay’s back up to Brett Favre.

By all numerical accounts, Rodgers should not have been a champion. But, as Rodgers modestly said on the David Letterman Show, “The things you can’t measure give people the most success.”

Law firm managers—like MVPs and sports stars—can’t always rely on rankings and outcomes. In fact, many times intuition about a person’s performance, potential, or aptitude is as important as checking the stats.

In hiring, promotions to leadership positions, or football draft picks, there are multiple factors and features that add up to success that are—literally—impossible to add up.

“The idea of measurement may seem obvious as a point of view, but in the innovation world there is a complication waiting to trip the unwary.  That complication is the need to focus on measuring features of the innovation ecosystem, rather than outputs of the innovation ecosystem,” explains Henry Doss, venture capitalist and contributor to Forbes.

“And the science of measuring features—things such as normative trust, win-win value systems, diversity of point of view, and so on—is not as fully developed as our ability to measure output.”

Basically, we trust numbers more than normative ideas, like reputation or reliability.

Why? When you think about it, who is more valuable to your law firm—the 4.0-GPA recent law school grad with book smarts or the mid-to-average law school grad who can think on his feet and hold his own in front of a judge?

In terms of motivation, would your employees become more productive with a monetary incentive or a simple “thank-you” note? Many studies believe that the latter proves more powerful.

Doss would ask law firm managers to answer the following three questions about the incentive system at your firm:

  1. To what extent does the incentive system create trust?
  2. To what extent does the incentive system create collaboration?
  3. To what extent does the incentive system create a “win-win” culture?

It’s time your law firm prioritizes and reinforces some its valuable, but non-measurable assets: a strong corporate culture or identity, loyalty of clients, or trust among its employees.

Although it is important to embrace non-measurable values like trust, reputation, or respect, Doss warns, “Never let the absence of measurement be an excuse to rely solely on judgment.”

So, seek to inspire, innovate, and incentivize normative values at your firm. But, in the long-term, also track your productivity, clients, IT systems, and revenue in numbers.

In American football, like law, the risks you take are both calculated… and not.

-WB

 

Teamwork on and off the football field is also about delegation. Give your law firm professionals C4CM’s guide “Effective Delegation: Strategies to Improve Performance and Productivity” to learn more. Available here.

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What Happens When Lawyers Love Their Jobs?

Recent studies have focused on “employee satisfaction” and its links with productivity to enhance profits in the workplace. When employees are satisfied at work, they are less likely to leave their jobs, theorists claim.

Increasing employee retention is a valid strategy for law firms hoping to reduce costs.

Hiring and training—in technical fields like law—are especially draining on bank accounts and human resources. In addition, new employees involve a lot of up-front costs, including hours of training instead of billables, business cards, welcome lunches, and slow learning curves that pay off only the long-term.

These costs are lost when an employee leaves. For firms, this conclusion doesn’t mean holding off on training new associates. But it does mean offering a job that makes employees happy to stay.

Figuring out the incentives that will make employees happy is, surprisingly, more difficult than researchers first thought. After all, economists have spent centuries working out complex game theory and identifying incentive systems that motivate mankind.

It doesn’t seem like a stretch to apply such theories to management.

Unfortunately for employers, however, an individual’s happiness is subjective and ever changing. In fact, sense the inception of Google, online searches for the term “happiness” have tripled—leaving analysts to believe men and women are still confused about which products they love, which lives to lead, and what professions will make them happiest.

The search for meaning in life increases in times of austerity, like an economic recession.

So, other than scouring the many search terms in Google, how can law firms know what will incentivize their staff?

First, conduct your own study.

Although academic research is useful for practitioners, the best way to understand your work force is to ask them. In fact, consider hiring a PhD student intern (or graduate) for an inter-office experiment.

Circulate surveys, conduct interviews, and analyze data of your own employees. Ask them about their best days at work, their worst days, and why for days they keep coming back.

Of course, higher salaries and monetary incentives will always be important (cash is king). But, depending on your corporate culture, company size, average age, or structure, for example, you may be surprised at how small, intrinsically-valued items serve as motivators.

For example, personalized letters of appreciation often go farther than gift certificates in motivating employees. Sure, if asked, employees might suggest monetary bonuses as incentive ideas. But, in practice, you may find that it’s the letters or kind words fom bosses that actually lead to increased productivity.

With this in mind, second, consider creative incentive systems.

A recent experiment offered participants two rewards for a task measuring productivity: a water bottle gift item or seven dollars cash. When asked to choose, 80 percent of participants chose the cash. However, when different groups weren’t given the choice, the results in productivity were surprising.

“The cash bonus didn’t have any effect on the speed or accuracy with which the students did their jobs,” reports the Harvard Business Review blog.

“However, those receiving the free bottle reciprocated by upping their data entry rate by 25%, a productivity increase that more than offset the cost of the bottle itself.”

So, although your firm should conduct in-house research and surveys about what employees find most satisfying, it’s important that first-person experience also drive your study. Don’t let employee contribution or opinions on “happiness” be the sole input for your productivity policy.

Discover what kinds of creative incentives you can offer associates. Maybe monogrammed water bottles are not the key to your firm’s efficiency. But, monogramed coffee mugs or cufflinks (at a reasonable price) may yield higher productivity returns than cash bonuses.

Finally, forget employee satisfaction and focus on employee engagement.

“Employee engagement is the emotional commitment the employee has to the organization and its goals,” writes Kevin Kruse, entrepreneur and NY Times bestselling author and his latest book is Employee Engagement 2.0, for Forbes.

There are many factors that increase employee satisfaction and happiness. This could be free meals, higher salary, or larger offices. However, not all of these factors play into increased productivity and profits for your firm.

Increasing employee engagement, however, leads to an increased commitment of employees to your firm, its clients, and its success. The direct effect of employee engagement is higher goal-seeking behavior and the organizational cooperation that yields financial returns for your firm.

So, when an employee asks for free Colombian-brewed coffee at your firm, think about the beneficial effects caffeine will have on employee concentration and attention span.

When employees have access to unlimited high-quality beans in the office, they’re less likely to take long coffee breaks at the neighborhood Starbucks. All-in-all, these create positive returns for your firm.

However, simply gifting your employees Starbucks cards will only increase temporary satisfaction for your employees. It will likely not yield any permanent results. It may even increase the expectation for more gift cards in the future—so that if employees stop receiving them, their productivity and morale will decline. It’s not enough that lawyers love their jobs. They must also love their firm, its partners, and its objectives.

Of course, all of these variables depend on the particular characteristics of your firm and its employees. That’s why the more you know, the better prepared you are to engage your associates productivity.

Former Campbell’s Soup CEO, Doug Conant, once said, “To win in the marketplace you must first win in the workplace,” Kruse reminds us in Forbes.

And to win the workplace, your firm must conduct its due diligence.

-WB

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Five Cold-Weather Perks To Give Corporate Lawyers

December is here and that means cold fronts are sweeping across America. For lawyers, winter often means less daylight and more work.

Firm administrators may notice the elevators filled less with holiday cheer, and more with cold-weather coughs and hobo layering. The season is dusting off those dormant cold and flu symptoms at the same time as it’s encouraging winter gloves. Forget power suits, associates are donning power hoodies and unsightly wool leg warmers to survive impending snow.

Worried about the health and wealth-fare of your associates? Make these five gestures for your employees so that everybody looks forward to a comfortable, happy, and presentable New Year.

1. Attorney-appropriate attire

Attorneys are well known for their professional attire. Power suits and ties, and recently-shined shoes are just a few of the cliché clothing items worn by associates.

However, as the years go by and stress builds, that freshly-pressed suit you wore for the first-year interview has been replaced by yesterday’s wrinkled, worn substitute. In winter, it’s even harder to look your best. Snow requires waterproof boots and cold weather necessitates a variety of mixed-and-matched layering.

Although fashion is not a firm’s first priority, image and appearance may be. In a downturn economy, firms should dress to impress. So, look to your neighboring stores and ask for a corporate discount.

For their part, high-end clothing companies may be looking to boost sales. Fashion is a luxury item that has been hit particularly hard by the recession. So, the combination of increased revenue for the brand and decreased clothing costs for the businessman will be win-win.

2. Gym memberships  

When it’s cold outside, people prefer to stay inside with a cup of hot chocolate, not free weights, in hand. However, exercise lowers stress, increases mood-enhancing endorphins, and sheds those unhealthy holiday pounds.

Encourage your employees to keep up with their fitness regime well before New Years resolutions by offering to pay a percentage of monthly gym fees. More than likely your firm will make up for the loss in revenue by an increase in employee morale and productivity.

3. Green tea  

Again, hot chocolate is the cold-weather drink of choice. But, temporary sugar rushes followed by sharp energy downswings will do nothing for an employee’s work efficiency or welfare.

Stock up on green tea—full of cancer-fighting antioxidants and other medicinal benefits—instead of its sweeter alternatives. Green tea also helps the immune system fight off wintertime colds. Most associates welcome any free, firm-provided hot beverage, so the switch will only be noticed in higher firm health and vitality levels.

4. Entryway coat closet

You can’t fault a person for wearing knee-high snow boots into the office when it’s December in Chicago. However, tracking water or snow footprints across the hallway and stacking large piles of damp coats, scarves, and gloves on mahogany desks is less than ideal.

Clear out a space at the entrance of the firm for a coat closet in wintertime. Not only will employees be grateful for the space, but it will be a good place for employees of all ranks and positions to converse—even briefly—about the weather and other trivialities. It will give biglaw offices a more “home-y” feel and encourage communication and friendship among colleagues.

It’s easy to stay cooped up in your office, door closed for warmth, in the wintertime. Find a way to break open communication barriers with the simple addition of a coat closet.

5. Holiday spirit

Finally, with performance reviews, possible promotions, and year-end bonuses (or not) approaching, it’s difficult to keep up that holiday cheer. As a firm, make a special effort in December to bring back the bright attitudes with luncheons, holiday-themed snacks, or even decoration.

Holiday doesn’t have to mean Christmas or Hanukkah, for example, rather pinecones and festive laurels adorning the office. Make “holiday” a neutral term by instituting a friendly workplace competition where the winner receives plane tickets to Aspen for the ski season or a that coveted Hermes scarf.

Whether through office incentives or other (less expensive) workplace ingenuity, fight the wintertime gloom with some December-time good spirits.

-WB

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Mutually Beneficial Alternative Fee Arrangements

Deborah Kuchler, a founding partner of Kuchler Polk Schell Weiner & Richeson, LLC in New Orleans, Louisiana, put forth an enlightening thesis on why alternative fee arrangements, if done correctly, can reward success, efficiency and creative thinking.  Her article, prepared for the Federation of Defense and Corporate Counsel (FDCC), assures her readers that attorneys will be able to retain existing clients and attract new ones with a well-crafted fee arrangement.  

For instance, with a fixed monthly fee, Kuchler notes, efficient, experienced attorneys are encouraged to focus on determinative tasks.  Working to provide outcomes in such a manner deters attorneys from getting bogged down in tasks that might produce a lot of work but won’t necessarily contribute to the results.  

Another form of alternative billing would be what is referred to as a “budget ceiling”. Costs above the established ceiling amount would serve as the cap for various phases in the budget.  Alternatively, the client and attorney would determine that any overages wouldl be automatically rolled over into the next billing cycle.  

The firm might arrange to send the client an advice-only retainer.  (A firm would also have the option of choosing to pay an outside contractor in this manner.)  The way this works is that a flat monthly fee is paid an attorney or consultant for analysis and advice.  It would be determined in advance just how many hours this fee would cover.  

In litigation cases, contingency fee agreements can take several forms other than the well-established and traditional flat contingency rate.  Depending on the client and attorney’s mutual goals, there are other ways in which fees may be collected contingently.   It might be agreed, for instance, that fees will be paid out depending on the amount of money recovered. 

Also, percentages may vary depending on whether the matter settles or goes to court. Finally, a guaranteed but reduced hourly fee may be part of the agreement.  This hourly fee would then be credited against the percentage fee, if the client wins.  


There is also task-based pricing, where each task in litigation will have a set price.  For example, each motion, deposition and discovery preparation—regardless of the time or complexity involved—will be the same fee to the client.  In such scenarios, attorneys must be careful to price carefully and to manage well the time spent on each task.  

Ms. Kuchler lists a total of 12 such creative fee arrangements, including one with additional incentives for non-legal services, such as providing material to a client’s legal department’s intranet site, or participating in training programs. And, in the matter of eliciting prompt payment, says the author, “law firms may offer a discounted rate for [quick] electronic payment, or, conversely, they may offer back loading or front loading…”   To read the PDF document in its entirety, go here: http://www.thefederation.org/documents/V59N3-Kuchler.pdf   See also:  Making Alternative Fees Work in Litigation: How to Approach and Craft AFAs

-EM

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MP Has Advice for Keeping Law Firms from Missing Budget Projections: Leaders, Take a Pay Cut!

A blogger at ABA Journal picked up some unheard of counsel for leaders of law firms that miss their proposed budget projections a few years back  No, it’s not “take a hike” (at least, not if you could do the right thing, and “lead your people, by walking behind them.”).  It’s actually  that you should take a pay cut.  And if you’re not willing to do that, then, noted the advice-giver he quoted, kindly take a hike.

Hard-working, revenue-producing partners, as shareholders, are not getting the performance they’ve been promised and deserve, said ex-MP Edwin Reeser, writing for Am Law Daily.  This warrants serious measures…like a pay cut.   The blog appeared in 2009, the midst of the unprecedented economic downturn–as did Reeser’s piece,  but it’s still pertinent today—even more so, when firms are playing catch up and facing new, streamlined rosters and revamped economic and IT infrastructures.

An ex-law firm leader in his own right, Edwin Reeser, at the time of his article, was a business lawyer who was managing partner of the Los Angeles office of Sonnenschein Nath & Rosenthal. Reeser reasoned that the way for firms to demonstrate faith in their own budget is to hold themselves accountable where it may matter most to them: in their level of compensation.

Taking cuts in their own pay would not only rectify the situation, he explained. It would also show the firm–and the world–that the firm’s leaders stand behind their budget projections. When leadership partners stand behind their budget projections, “the process will deliver a budget that will finally confront reality.”

Reeser says: “It’s time for the talk to take a back seat to the walk that will instil confidence” in leaders who are asked to keep in mind the best interests of the firm.”  Those unable to do that, he says, should step aside and let more competent leaders lead…those who “take the responsibilities of leadership seriously.”

“BigLaw has witnessed significant shortfalls in budgeted net operating income for many firms,” Reeser notes. The outcome has been stagnant or reduced distributable partner income, revoked job offers, deferred start dates, summer programs that have to be cancelled and reconfigured partner positions.  “Is anybody keeping copies of annual budget and forecast income memos, taking notes, and comparing management’s promises to actual results?” he wants to know.

Reeser’s buck-stops-here approach emphasizes that, if firms—specifically Big Law firms–fail to bring the budget into line with the usual practices, i.e., layoffs and partner deequitizations, at that point, the voluntary reduction in the pay of all persons in positions of leadership, up to a maximum of 20%, should come into play.

Less than that, he says, “doesn’t have enough [of an] incentive” and more seems too much of a disincentive.  “Build in incentives for superior performance if necessary,” he adds, but, truly, it should be enough for you, as leader and partner, to want the best for your firm, and, in some scenarios, may ensure your firm’s survival.

To read more, go here: http://www.abajournal.com/news/article/law_firm_leaders_should_meet_budgets_or_take_a_pay_cut_ex-mp_says/  

and here

http://amlawdaily.typepad.com/amlawdaily/2009/08/accountability.html

-EM

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Bureaucracy Benefits Law Firms (And Bails Out RI’s Federal Judgeship Nom)

This week, the GOP took advantage of Congressional red tape to block a federal judge nomination. Republican Party leaders orchestrated a filibuster to stop Rhode Island trial lawyer John McConnell from reaching the bench. And, until yesterday, the GOP almost succeeded in manipulating the American bureaucratic system.  

“A few years ago, Republican senators argued that filibusters of judicial nominees were unconstitutional. They said that every nominee was entitled to an up or down vote,” said Democratic Senator Patrick Leahy of Vermont, who is also chairman of the Senate Judiciary Committee. “Well, of course they said that with a Republican president. Now suddenly things have changed.”  

The use of filibusters is still a contentious issue among U.S. policy makers. However, bureaucracy—rule-making, hierarchy of authority, and administrative guidelines—is almost unanimously viewed as a negative entity—inefficient and flawed. In fact, you’d be hard pressed to find a government or business official who would laud the merits of bureaucracy. Law firms, on the other had, have been shown to benefit from corporatist organization, which maximizes employee loyalty and increases attorney commitment.  

Implementing a strict administrative and hierarchical system at law firms adds structure “by enhancing employee integration, upward mobility, participation in decision making, and legitimacy of the authority system,” which lawyers are shown to highly value. As such, these systems provide incentives for lawyers that increase their commitment to the firm, according to a study by Social Forces.[1]

Traditionally conflict has divided professional goals from bureaucratic ones. In the case of federal judge nominations, the conflict is between professional and political goals. Is the best candidate for the job the best choice for the party?  

But law firms are unique entities. Bureaucracy is built into attorney titles and functions already: first-year associates are belittled by second-year associates, and so on. Status is determined by the number of years an attorney has been practicing law. It is gained gradually and laterally. In the same way, lawyers value and are motivated by a similar structure within their law firm administration.   

“The most significant variables appear to contribute to lawyers’ professionalism and professional careers in that they provide a sense of collegiality, contribute to professional career opportunities within the firm, and allow for individual discretion and control.”   

We’ve already seen how autonomy, mastery, a sense of purpose motivates employees to work productively, more than providing monetary incentives. These three intrinsic incentives can be achieved through the implementation of a strict and transparent bureaucracy. This means standard language on documents and memorandums, policy manuals regarding time and schedules, associate and paralegal training programs, and a reporting chart, so that it’s clear who is responsible for creating or changing these rules.      

The benefits structure should also be outlined in terms of what tangible work product will earn an employee a promotion or other professional reward. And, the system should be a democratic one, where each echelon retains some sort of representation or decision-making power.  

The Senate filibuster failed, and President Obama’s choice for federal judge was at last confirmed in a 50-44 tally on Wednesday. But, that doesn’t mean all members of government weren’t given a vote, voice, and choice of administrative recourse in the matter.  

 

-WB

To read the AP coverage of the confirmation, go here.

[1] Walllace, Jean E., “Corporatist Control and Organizational Commitment Among Professionals: The Case of Lawyers Working in Law Firms” Social Forces; The University of North Carolina Press, March 1995,73(3):811-839.

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