A piece of the pie for a piece of the work

Everyone wants a piece of the pie - and we're not talking about banana cream here. In terms of law firms, lawyers want a piece of the pie, too - and firms should strongly consider serving it to them. All firms of two or more lawyers search for workable systems for dividing firm profits. At the heart of this examination is the very definition of the firm itself: Is it a firm, or is it just a loose configuration of professionals who share office space and expenses while pursuing individual rewards? Although most lawyers are taught to be independent and contentious as opposed to interdependent and conciliatory, the legal profession is examining the benefits of "team lawyering." By definition, teamwork means "partnering with other lawyers in the firm to reach common goals." In this way, the firm is promoted, and the firm is the legal representative of clients, not any single lawyer. Partnering or teaming may provide the long-term salvation of the firm. No one partner or segment of lawyers (such as a practice group) can control the firm; the departure of any such partner or segment will not destroy the firm. In today's atmosphere of frequent and easy lateral transfers, the survival of a firm is a serious challenge. If a firm has a formula system for compensation, then origination or "source" is normally very significant. Rewards in most such systems go on forever. On the other hand, if the firm wants to promote "partnering" or "teamwork," law firm culture must change. At the very base of every decision in the law firm is the lawyer's compensation. So, to change the way lawyers think, in order to change the firm culture, changing the components of the compensation system is necessary. The compensation committee or the managing partner must affirmatively state that a requirement of being a member of the firm is that other members of the firm be involved in all matters involving X dollars exposure, certain types of cases, etc. Base compensation must, in some fashion, be tied to the effectiveness of the lawyer in involving other firm lawyers as part of the team delivering legal services to clients. Being perceived as a rainmaker for the firm, or source of the client relationship, usually brings with that perception a larger percentage of the firm's compensation. But if that compensation scheme continues indefinitely, the culture of the firm remains entrepreneurial and isolated, not cooperative. The source credit must be terminated at some point. If there is no sunset provision, the firm will never institutionalize the client and the work generated from that client. Ultimately, the work must become a house account so that the firm will keep the client because the firm did good work. At the end of each year, firms distribute bonuses. The bonus or profit pool that will be distributed should be based, in part, on the perceived success of the lawyers working together as a team, not just being a "rainmaker" or "spreading the word." The size of the pot for bonus payments for team lawyering will be determined based on the importance to the firm of the objective of teaming. When the bonus system includes payment for teamwork, the system will reinforce the new firm culture of cooperation and client services will improve. The world of business is changing. Controlling client work is out; fluid collaboration is in. Power is out; empowerment is in. Individualism is out; teamwork is in. Organizations will always need to recognize outstanding individuals, but an effective recognition program must also reward the collaborative efforts of teams. ----- Edward Poll, J.D., M.B.A., CMC, is a law practice management thought leader and contributor to this publication. His website is at www.lawbiz.com. Published: Tue, Mar 31, 2015