Did you read a November, 2011 New York Times article: What They Don’t Teach Law Students: Lawyering? It referenced an American Lawyer survey finding that 47% of clients surveyed did not want first or second year associates working on their matters. It also identified what clients are saying to firms:

But the downturn in the economy, and long-running efforts to rethink legal fees, have prompted more and more of those clients to send a simple message to law firms: Teach new hires on your own dime.

Are you  in a firm that is investing in your  associates’ skills, or is only interested in your associates’ billable hours? In the last week I have coached and taught senior associates in two firms on how to develop their skills and become successful at securing, retaining and expanding relationships with clients. Those two firms are not only investing in their associates. They are also investing in their clients.

When I was named the partner responsible for attorney development in my old law firm during the booming economy, I spent a lot of time with our firm’s associate committee. I discovered that very few of our associates had any kind of plan with written goals to develop their skills and become more valuable to our clients. (Do your associates?) I decided to teach career planning with written goals to the associates in each of our offices.

I scheduled my first session for a lunch program on a Friday at our Los Angeles office.  On Tuesday that week I learned that very few of our Los Angeles associates had signed up. The office administrator told me the reason was they “have to get their hours.”

At the time our firm had a grid with pay and bonuses based on hours beginning at 1950 hours and increasing at every one hundred hours . Our associates knew how to work the system. We had a large number at 1950 to 1960 hours and then it dropped off dramatically. Not unexpectedly, a second surge occurred at the 2050-2060 numbers, then another dramatic drop off. I could go on, but you get the picture.

I thought our bonus system was backwards. When you reward hours, you get hours. Your lawyers are more concerned about their hours than they are about the quality of their work. Clients do not want to pay for more hours.

Believe it or not, they would prefer to pay law firms for work done more efficiently because the associates have developed the skill set on the firm’s dime. I love the opportunity to work with law firms that “get it.”

 

 

 

  • Legal Business Development

    Great post on law firm management! Another common situation I have seen in my career is that of mixed messages to associates. I will give you an example I have experienced first-hand. Take a firm that tells associates they need to invest time and effort in client development and even has several partners speak to associate groups regarding this issue. This is clearly a great start. However, after the partners have finished giving their presentation and open up questions to the group, a brave associate asks, “would you rather me bill 2,000 hours and spend 500 hours on client development or bill 2,500 hours.” Both partners quickly replied, “both, 2,500 billable hours and 500 hours on client development.” This brought on the question, if I take a prospect to lunch, give a presentation or write an article, when should I make up this “lost” billable time? The partners’ response was, “that is why weekends were invented, you should come in on Saturday.” The associate responded, “what if I already come in on Saturday because I have a lot of work and am billing 2,500 hours.” The partners’ response, “then you should come in on Sunday too.” The associate stopped asking questions.

    The basic point is that it is not enough to tell associates that client development is important (even if through great programs). If the law firm’s culture does not show associates that the time spent developing clients is valued, they will not make it a point of emphasis. Actions speak louder than words.

  • Andrew Jenkins

    Great post, Cordell. Basing bonuses soley on hours is a terrible idea. Like you said, if all you reward is hours, all you get is hours. It reminds me of a story a professor of mine told us in college. He taught international business strategy and was involved in business incubators in Eastern Europe and the former Soviet Union.

    On one of his visits, he came across a former plant manager who used to run a bolt factory in the USSR. (One factory made the nuts; and another made the bolts. Very communist.) His factory had a quota for so many thousand tons (by weight, not by number) of bolts.

    As the end of the year approached it appeared as if his factory would be nowhere near his quota. He had plenty of raw material, but the factory just could not turn out that many. So he concocted a solution.

    He had his spare workers (there were plenty) dig a giant hole in the ground in the basic shape of a bolt; melted down the raw materials; and poured it into the hole.

    While he made his quota that year, the output was completely useless.