The competition for high-quality staff in the legal industry has reached unprecedented levels. According to a recent survey conducted by ALPMA, 75% of law firms have identified talent retention as a critical priority. As a result, many firms are now offering a range of both monetary and non-monetary incentives to attract and retain top talent. The ALPMA Survey revealed that the use of financial bonuses and incentives is more prevalent than ever before, although firms still exercise selectivity in awarding bonuses.
How do law firms develop employment offerings that attract the right team members and support their continued performance in line with business goals?
While it is widely accepted that cutting someone’s pay would undermine their performance, it does not necessarily follow that significantly increasing their pay will result in better or more work.
According to the Deloitte Global 2021 Millennial and Gen Z Survey, millennials look for a business that prioritises innovation, enhancing employees’ lives and careers, and making a positive impact on the environment. However, it is important to note that these may apply after obtaining acceptable compensation for skills and experience!
The top three reasons given in a 2022 survey for employees who quit their job is ‘management’, followed by low pay and a lack of career progression opportunities. When choosing a new job, top priorities were pay and bonuses, flexibility of hours, organisation values and the potential to attain new skills and qualifications.
In the recruitment stage firm’s need to offer a competitive financial package and communicate business goals and how you want your people to experience work in terms of culture and style.
Effective retention and performance incentives reward and recognize the right people at the right time, for the right outcomes. However, many firms continue to focus solely on billable hours and revenue bonuses, despite little evidence that such incentives enhance financial or client service outcomes. In fact, these types of incentives can have a negative impact on internal culture, creating an environment of haves and have nots.
To ensure that your firm’s incentives are driving the right outcomes and behaviour, there are several questions to ask. First, are performance targets realistic and achievable, yet still challenging enough to be considered a stretch achievement? Additionally, are rewards transparent and easily understood by employees? It’s also important to consider whether you are seeking to drive sustainable performance or create a short-term surge.
Furthermore, it’s important to consider whether there are unintended outcomes or adverse consequences associated with your incentives. Can results be easily gamed by employees, or do they create a sense of entitlement? Finally, it’s crucial to be confident in the measurement of results and benefits associated with incentives.
When designing performance incentives, there are several guiding principles. First and foremost, simplicity is key. The administration effort required to implement the incentives should not outweigh the benefits they provide. Additionally, both monetary and non-monetary rewards should be integrated to motivate employees. Targets should be challenging but attainable. To prevent staff burnout and excessive costs, caps should be placed on bonuses.
It’s also important to have systems in place to track performance and report results. Transparency is crucial, as a lack of clarity can cause confusion and discord among employees. Finally, it’s important to communicate clearly and quickly to resolve any conflicts or misunderstandings that arise. By following these principles, incentives can be designed to deliver the desired outcomes.
Success depends on more than just hitting targets and meeting performance metrics. It’s about creating a work environment that supports your team’s desired work style and behaviour.
Your practice management software is critical. With the right software, you can customize metrics to assess work throughput and results, including new matters created, billed, invoiced, and receipted. You can also track utilization and realization rates, budget performance and outcomes, workflow, and timelines.
But practice management software can do even more, by improving employee experiences, you can improve the customer experience.
Integrating information in one platform makes critical information more accessible. Save time and resources from client intake to final invoice using online engagement tools, document collaboration, and automating work processes.
If you’re wondering how to bring these benefits into your law firm, consider arranging an online demonstration with Cabenet. We can help take your practice and matter management to the next level.