Friday, January 5th, 2007
Lawyers, legal marketers, administrators, if you do one thing today have a quick look at Seth Godin’s blog. He offers up a most eloquent distinction between strategy and tactics, and sends us a valuable reminder on when it is time to re-think strategy. Here’s an excerpt:
Here’s the difference: The right strategy makes any tactic work better. The right strategy puts less pressure on executing your tactics perfectly.
Here’s the obligatory January skiing analogy: Carving your turns better is a tactic. Choosing the right ski area in the first place is a strategy. Everyone skis better in Utah, it turns out.
If you are tired of hammering your head against the wall, if it feels like you never are good enough, or that you’re working way too hard, it doesn’t mean you’re a loser. It means you’ve got the wrong strategy.
Here’s the big question for consideration. Are your tactics bringing in the big wins or are they just barely keeping your head above water?
For another story that describes the distinction between strategy and tactics we can look to the Second World War when Winston Churchill proposed the strategy:
“Attack the soft underbelly of Europe.”
This strategy determined the tactic of advancing on the German empire from North Africa, Egypt, to Sicily, and through Italy. The strategy was dead on. The tactics worked.
Here’s the caveat. Once we have bought into a strategy, and are deep into tactics, it’s easy to loose sight of the distinction. When the tactics fail or underperform it is tempting to look to different tactics rather than back to the strategic vision and plans.
In addition, many lawyers, administrators, and legal marketers, are trapped in a tactical silo, as so many firms still lack the strategic plans that come first.
If your firm, practice group, client team, or your own practice is struggling, take the time this January to review and re-think your strategy and ask:
“What is our strategy?” This should be answered in one or two sentences.
“Is this strategy paying off?” If not, “what’s working?” “What’s not?” “What could make a difference?”
And if you don’t have a strategy, make this the year that you develop one.
Posted in Goals, Marketing, Strategy | Permalink | No Comments »
Thursday, January 4th, 2007
Is there any more contentious issue at law firms then compensation systems? At most of the firms I have worked with there is dissatisfaction with the current system but nobody wants to take on the challenge of developing something new.
In late 2005, I attended a seminar held by David Maister in Seattle. When he opened the floor up for questions a lawyer immediately brought up the issue of compensation systems and a long and fiery conversation ensued. The merits and drawbacks of performance-based compensation systems vs. lock-step systems were debated at length.
Maister advocates for a compensation system that emphasises a firm’s active management of performance. I recommend his blog post of April 3, 2006 for a valuable review of the two systems. Here’s an excerpt:
The disadvantage of pay-for-performance compensation systems is that they provide a wonderful excuse not to manage. If someone’s performance is down, instead of management seeing that there is an obligation to go help that person, they have a wonderful cop-out. They say, We cut his pay. We’ve done our job. The rest is up to him or her.
Contrast this with what happens in a system where everyone gets a relatively fixed salary or share of profits, which changes as you get more seniority, if you survive.
In such a system (often called a lockstep system because people move in lockstep up the pay scale), if someone underperforms, you have only two choices. You either (a) work with that person and help them improve to deserve the same income as their peers or (b) if you cannot restore them to full share, you have to ask them to leave. Notice that having lockstep without the guts to deal with performance issues is clearly a disaster! A fixed-share or fixed salary system FORCES YOU to manage, ie to be intolerant of underperformance.
In other words, by not paying for performance, you end up with higher performance by tackling performance issues. By paying for performance, you get less performance because the system allows you to accommodate underperformance.
I have always been a fan of lock-step compensation systems. I began my legal career with an international law firm based in London. When the firm opened their New York office one of the attractions they offered their lateral hires was lock-step partnership. At the time, the New York office Managing Partner conducted many interviews with the US legal press on the advantages of the lock-step system. The system gave the international firm a great deal of flexibility in deploying their lawyers strategically around the globe. The New York office Managing Partner was a top-class securities lawyer from London. Because of the lock-step system he was able to move from London to the New York office to support the expansion even though it meant his billings were significantly reduced for a number of years.
Now many years later in Vancouver, one of the complaints I hear from many partners is that firms do not adequately encourage nor support them in managing practice groups, nor in engaging in business development activities. When I have spoken with these partners about the problem I have learned that for some the issue is a lack of flexibility in the compensation system for billable hour targets when a fee earner is undertaking additional managerial responsibilities.
In Vancouver we have yet to see anything approaching a lock-step system. I did though recently learn that a local law firm has taken the bold step of implementing a blended form of compensation which rewards the performance of the team rather than the individual.
Over lunch in late December, Simon Taylor from Catalyst Consulting told me about some very interesting work he had been doing with a Vancouver mid-sized firm. Working with the Managing Partner, he has helped the firm design and implement a compensation system that rewards the work of the practice group. Individual partner’s compensation is tied to the performance of the practice groups they are involved in. One of the measures of performance is client satisfaction. The firm has implemented a client satisfaction survey. Lawyers are only compensated when they reach a level of client satisfaction of 94% or higher. The goal of the system is to reward teamwork in the practice group, and promote an emphasis on client service.
This compensation system is basically saying “we will reward you for achieving this set goal”. That works fine for the lawyers who naturally work in this manner. But for the others, how is the firm going to help them to learn the new behaviors required to succeed? Incentives alone are not enough. They don’t get around the essential work of managing the people and supporting their efforts to adapt to the new system.
What I wonder is, what is the firm doing to support the lawyers in effectively managing their practice groups? How is the firm helping the lawyers to deliver this outstanding service? How is the firm setting up these lawyers to succeed?
I spoke with Simon this morning and he will be adding a comment today that elaborates on the above. Thanks Simon!
Posted in Business Development, Compensation | Permalink | 2 Comments »Monday, January 1st, 2007
Goals – make them bold. Make them powerful. Make them compelling.
Learn – something new every day. Watch and listen for the lessons that will present themselves.
Enjoy – the journey. Tie your happiness to the process, not the outcome.
The joy is in the doing. I have a friend who recently launched a new boutique law firm. He has big goals for his firm, and lots of hard work ahead. And you know what? He is having the time of his life, because he enjoys being a legal entrepreneur. He likes the management of the practice as much as the practice itself, and his enthusiasm is contagious. His first six months have been very successful, and his clients like the feel of the new firm.
What is working for my friend is that his personal interests, goals, and the process are all in alignment. When you are making your own plans this year, consider a similar strategy. What goals are most meaningful to you? What actions can you take to move your plans forward that resonate with your own personal interests? What would you most like to invest your time in?
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