Rewarding Behaviour

Motivating people at work can be a difficult thing. Not everyone is as driven and committed as you are and so an entire industry has developed which aims to help organisations get the most from their "most important resource".

Sadly, as difficult as it is to do it well, it's very easy to do it badly. Accidentally rewarding the wrong behaviour happens all the time. Consider the item posted by "Roll On Friday" about Morton Fraser(see here). They have, apparently, abolished the annual fee targets for their associates. This step is a very good one, given the poor value gained from using hours worked, or turnover, as a measurement of success. Sadly this is not their only change. Morton Fraser have also chosen to adopt what they call "Peer Benchmarking" whereby "...a league table is created for each level of fee earner, and the aim of the game is to get to the top of it."

Let's just look at the behaviour that this system will encourage and reward:

1. Reduced communication. There is no benefit, now, in associates helping each other or in discussing the matters that each is working on. In fact, the more secretive they are, the better, since each associate is in direct competition with every other associate
2. Reduced cross-selling. As mentioned above, there is no benefit for an associate to sell the services of another person if there is a chance that he or she is simply bumping up the hours of a competitor.
3. Slower work. More hours = more turnover, unless the client is on a fixed fee. Not only that, but there is actually a disincentive for associates to do a handover of going away on holiday. If the associate working on a matter is going away for a long weekend, it is in their benefit to lock the files away so that no one else can work on them.
4. More focus on turnover. As any regular readers will know, I detest the obsession with turnover that is displayed by most law firms. This system simple enforces a belief that more hours and more turnover is a good thing. No wonder the "long hours culture" remains.
5. No focus on profit. Associates are being rewarded for earning more for the firm. It doesn't matter if the work produced a net profit of 1% (or even a loss), the associate will still be rewarded for doing more work. This could be fatal for the firm.

So what should they do? 

Well, removing the annual fee target is a good start. Why not have a "Contribution Target" instead - based on the profitability that they have added to the firm? Why not have a "Client Satisfaction" target and a "Partner Satisfaction" target for the associates they have worked with (and while on that subject, why not have a "Partner Satisfaction" target where the associates have some input).

Focus on cashflow and profit (in that order) and then, and only then, turnover.