Does “Friendly” Competition Among Associates Increase Profits For Your Firm?

Sales industries already work off of a leaderboard form of organization. By ranking their employees based on performance, companies encourage competition among their employees and reap the benefits.

Competition, as we all know, leads to efficiency, higher productivity, and sales. So, can law firms learn to adapt this style of internal incentivizing and motivation of their work force?

Should law firms restructure their case teams to mimic a sales environment?

This is how it works.

“Instead of distributing work evenly among employees, winners-take-all organizations allocate according to merit: Better workers take more assignments, and the others get what remains,” explains Serguei Netessine and Valery Yakubovich for the Harvard Business Review blog.

“The model exploits the fact that workers differ dramatically in productivity because of such factors as skills and attitude, which can be hard to assess when hiring. Over time, it may induce low performers to quit, leading to a higher-performing workforce and a constantly rising bar.”

Attorneys who took the bar shouldn’t be afraid of a little friendly competition, right?

Some service industries—specifically the restaurant business—have taken this model to the extreme. Look at Not Your Average Joe’s, for example. Employees at this restaurant chain know where they stand in relation to their peers.

This restaurant takes advantage of a new workforce management system Muse provided by Objective Logistics, Inc. This system doesn’t forecast sales and seasonality like most staffing software would. Instead, the program tracks staff performance in per-customer sales, satisfaction (tips), and other factors.

In this way, higher-rated servers are given more tables to work and receive preferred schedules for working them. Not only does the establishment profit, but also the employees—at least those at the top—do, too.

So what part of this service-industry business strategy translates into law? First, law firms are definitely a service-oriented business.

After all, customer satisfaction is equally important in the office as at dinner. Most law firms, however, don’t bother to measure and weigh this satisfaction.

Sure, winning cases is one thing. But, winning cases is not the sole factor in client satisfaction.

For example, there’s the number of cases and transactional deals a company assigns one firm (similar to high per-customer sales). And, there’s the type of fee agreement negotiated with that client, as well as letters of praise or gifts received by them (think, tips, for a restaurant).

Next, there are the employees. Favoritism can play a large part in determining which associates are assigned certain cases. There’s also expertise that comes into play.

Notwithstanding this inherent system, wouldn’t it be nice to track which associate is considered most capable by the partners and which associate succeeds at handling the most important and high-volume work?

Not only would this make end-of-the-year reviews and bonus much easier to calculate. But, transparency of this model of measure would provide competition among your attorneys.

Again, competition among associates equals higher profits for your firm. And, don’t forget that low-performers at your firm will clearly understand what key actions will lead to improvement and advancement up the leaderboard.

What sales has honed, nay mastered, in the art of employee incentives and motivation is still lacking within law firms. It’s time to adopt a similar sales strategy and create definable, transmittable measures for success and advancement among your associates.

A leaderboard can vastly change the way client satisfaction and associate career path is viewed and improved at your firm.

-WB


Check out HBR’s interview with Not Your Average Joe’s CEO, Stephen Silverstein, who founded the firm in 1994 and Colleen Cushman, one of the restaurant’s servers in Beverly, Massachusetts. Here’s what they had to say about the system.

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