If you’re looking to improve your firm’s performance, John Remsen, Jr., President of The Remsen Group, advises keeping two thoughts top of mind:
- What gets measured gets done.
- The culture of firms is largely dictated by what is tolerated.
Remsen should know – he has spent more than two decades helping hundreds of law firms and thousands of lawyers improve their performance.
“This advice applies even more so to smaller law firms – where time and resources are very limited and a single bad habit can infect the culture fast,” he notes.
That’s why he believes owners and managers of small law firms must diligently and continuously measure performance so that they can immediately address any issues that might undermine success. To do so, he recommends leveraging metrics while taking the following steps to motivate associates to their highest levels of success:
1. Look beyond hours.
“Most firms expect associates to produce 1,800 hours a year at minimum, then they get a bonus at 1,900 hours. But where there’s pressure to generate hours, there may be a tendency to gin up hours that may or may not be in the clients’ or the firm’s best interest,” notes Remsen. “Make sure associates invest in quality hours for which you can bill and collect.”
He believes one of the easiest way to achieve this is by noting how often hours are written off – if work is done efficiently, there will be fewer write offs. However, there’s no easy fix to ensuring every hour is efficient; that requires ongoing mentoring, feedback, support and supervision.
This brings us to the next step.
2. Reward quarterly.
Don’t wait until the end the year to conduct reviews and award bonuses, advises Remsen. Instead, evaluate and assess associate performance every three months.
“This way, there’s time to address performance issues. When an associate is having an excellent quarter early in the year, they’ll get full credit for that. When reviews wait until the end of the year, they may be more heavily weighted toward the final quarter,” he explains.
3. Measure what you want accomplished.
“If you’re only basing reviews and rewards on billable hours, that will be your associates’ focus,” Remsen notes.
He shares a typical example of how this plays out: Leadership will announce that everyone must have an individual marketing plan. They conduct a workshop then hand the associates a form to fill out and demand they detail how they’re going to drive business to the firm. The associates dutifully obey and hand the forms to a partner’s assistant, who shoves them in a file. Never again do they see the light of day.
“And then firms wonder why associates aren’t making any effort to bring in new business. While some firms award origination, it may take years for young lawyers to see their business-development efforts bear fruit,” says Remsen. “Instead, set expectations. Monitor them. Hold people accountable and reward the behaviors you want to see.”
4. Play to competitive spirit.
“I am surprised by the outcomes firms produce when they use a little light-hearted competition to change behavior,” he notes. “While skeptics may dismiss gamification, you can’t underestimate the desire to be better than the guy next to you.”
He provides an illustration of this could work.
“Say, in the context of billing, you want every associate to bill at least 150 hours per month. You could distribute a report listing all the associates who achieve this goal in green, and those that don’t in red. No one wants to see their name in red,” he says. “Award those who achieve their numbers with a $250 gift certificate to their favorite restaurant.”
These recommendations become even more effective when they’re underscored with:
- Liberal praise.
“Public praise can be tremendously motivating. Catch good behavior and heap authentic praise in front of other lawyers,” says Remsen.
This can be as simple as taking time during a monthly all-attorney meeting to call out associates for a job well done.
“Make an effort to praise because lawyers are trained to be negative and quick to criticize,” he notes. “In fact, for every negative comment you’re tempted to make, find three genuine, positive comments to counter it. Furthermore, keep criticism between yourself and the associate. Nothing is more demotivating than being dressed down in a room full of people.”
- Consistent expectations.
“Be clear about what it takes to succeed at your firm and make sure no one wavers from that message,” advises Remsen.
He recommends letting associates know what you expect in terms of collections, and billable and nonbillable contributions. Document expectations firmwide, so associates aren’t hearing different messages from different partners. Then, track and monitor activities and reward accordingly. So when their colleague gets a bonus and they don’t, they’ll know precisely why.
Furthermore, he exhorts law firms to be very clear about what it takes to become a partner.
“Define the path to success at your firm, beyond meeting billable hour expectations. Ensure associates realize that hanging around seven or eight years won’t automatically make them a partner – that they need to be all in. Articulate very specifically what this means,” points out Remsen.
Many small law firms are turning to law practice management software with built-in financial reporting to easily track and understand key performance metrics for attorneys:
- Time entries and collection realization by attorney so you know how many hours they’re billing and how many of the hours clients actually pay for. You should be able to easily measure this information by the month or quarter.
- Write offs so you can quickly note if an associate may not be working with optimal efficiency.
It’s even better if you can print off these reports in the format that’s easiest for you to use – whether that’s Word, PDF or PowerPoint. That way you have something to reference in your reviews with each associate.
“With so much turbulence in the legal industry, you can’t afford to take a laissez-faire attitude toward performance,” concludes Remsen. “The most successful law firms will be lean, mean fighting machines that are always on top of performance metrics to motivate change for the better.”