Partners are not motivated by money.This comes as a surprise to observers, who cannot understand how people who earn so much can be said to not be motivated by money.
But it's true.
Few partners are energised to work to hit a financial target. The managing partner perhaps and the occasional "other". That's because most partners have a different goal. To work for good clients, who offer interesting work, and who are willing to pay full rate, without being asked or chased for fees. Yes, revenue is important, but they want it as the result of the above, not as the goal.
Despite this truth, business planning is often number-centric. Working back from PEP to margin, to chargeable rate and chargeable hours via machinations of the DuPont formula we decide targets, goals, measures and indicators. To a largely indifferent partnership. Managing partners try to hold partners accountable to numbers which have little or no motivational power. Some are hit. Some are not. But it is despite, not because of, the number-focus.
Meanwhile on the ground, most partners agree that they just want a fair remuneration system. There lies the problem. Who decides what fair means, let alone what it looks like in action? Whatever the definition and process, some partners will cry foul. Some will compare themselves against a colleague ("Susan never cross-sells"), others a former colleague ("Simon at Pinsents is a poor lawyer yet he gets £500K) and yet others stake a technical claim ("I should get credit for Eric's work because I made the introductions"), and so on.
These debates generate their own negative magnetic field, attracting the in-fighters, dragging down momentum. The test is, "does the remuneration reflect the desired behaviours?" That is, do the people who do what we want get rewarded? If "yes" - or in the real world, "mainly yes", well done. You will always have those who feel hard done by. The solution is to set up an appeals committee.
If you want to drive behaviour change, however, the focus should be on convincing the partners that your chosen strategy will bring in better clients and better work - a 100% recovery rate and pay-by-return of post are usually bigger challenges. You need not only "consulted-convinced", but "committed-convinced".
How?
You wouldn't want me to give away all my secrets, would you?
Some people are born curious. They always want to know how, why, who, when & what? And why not? And what if?
Curious people make great salespeople.
This is because they demonstrate the 2 characteristics of great salespeople:
- They ask the right questions
- They listen to the answers.
Clients love curious people, because they ask great questions which force the client to think. Then they help the client talk through the issues raised. Which makes the questioner be more like a valued consultant than a salesman - or even a lawyer.
Lawyers are trained to gain deep specialism in a narrow field. They ask questions in this narrow field to get the information necessary to do great legal work. As a result, however, they often miss joining-the-dots. They feel awkward asking questions outside their legal expertise, lest the client is offended or baulks at the question.
Too many fail to engage with their client's business, which is a shame, because clients love talking about their business.
"Knowledge speaks but wisdom listens" Jimi Hendrix
Things continue to get tougher
RBS have asked law firms to consider Mexican wave arrangements to drive down fees. Others are said to be following suit.
Tenders are no longer won by offering wafer-thin margins, as more and more firms drift towards low price as their key differentiator.
To lower price, most firms have considered off-shoring or outsourcing for routine work to reduce costs, but this is open to all firms, so cannot offer a definitive advantage.
Many firms are stuck in the middle - seen as neither volume producers or high-end practitioners by their clients. One solution being tried by some firms is the "Waitrose essentials" approach. These firms are looking at their standard offerings and finding ways of making them simpler to understand, simpler to buy, and tying the product to a bottom-line saving for the client.
This methodology requires some lateral thinking from the law firm partners, who will typically state "everything we do is bespoke" & "we cannot measure a bottom-line benefit for the client".
We have worked with other firms, in most sectors, and know this isn't true. In the meantime the firms that change will eat the lunch of those who say it isn't possible.