Compensation Innovation
An in-depth exploration into the future of law firm compensation
Timothy B Corcoran, August Aquila, John Chisholm, Paul Lippe, Dan O’Day, Rebecca Holdredge, Arthur G Greene, Simon Nash, Benjamin Viney, Polina Pavlova, Nina Gray
Published: 2018
Pages: 100
eBook: 9781787426733
Thorough and practical advice that will enable firms of all sizes to develop fit-for-purpose compensation systems that can be effectively managed to drive the right behaviors and, in turn, financial success.
But it's not enough to simply add performance-related elements at the edges of these. Shifting generational-based attitudes; changing career aspirations; increasingly demanding clients; and pricing innovation and development in the range of benefits that can be offered (both financial and non-financial) all conspire to urge firms to rethink how their compensation system operates at all levels, across the whole firm.
By reviewing these emerging factors, Compensation Innovation: An in-depth exploration into the future of law firm compensation aims to inspire law firms towards future proofing their compensation systems so that they continue to deliver results as their partnerships age. Exploring also the interplay between compensation and succession planning, and compensation and lateral hiring, the authors keep one eye to the future.
Table of Contents
| Cover | Cover | |
|---|---|---|
| Title page\r | i | |
| Copyright page\r | ii | |
| Contents | iii | |
| Executive summary | vii | |
| About the authors | xi | |
| Chapter 1: Why we need to reward people differently | 1 | |
| Financial reasons | 2 | |
| Operational reasons | 5 | |
| Rapidly changing competitive landscape Mergers and demergers | 7 | |
| Generational reasons | 8 | |
| Summary | 13 | |
| Chapter 2: Compensation in a timeless practice | 15 | |
| Introduction | 15 | |
| The Oldlaw compensation model | 16 | |
| The timeless model | 16 | |
| Firm-wide key predictive indicators | 17 | |
| Individual key predictive indicators | 18 | |
| Summary | 21 | |
| Chapter 3: Common metrics, common methods, and common success – aligning law firm compensation with client success | 23 | |
| Evolution of model from the classical to 2018 | 24 | |
| What’s working in common success | 25 | |
| A roadmap for going forward | 28 | |
| Conclusion | 30 | |
| Chapter 4: Staying in the race – why top firms pay so much for associates (despite losing money) | 31 | |
| The reason new associates are unprofitable | 32 | |
| The bimodal salary curve | 34 | |
| The success cycle | 36 | |
| Winning the race | 36 | |
| Starting salaries as a marketing tool | 38 | |
| Chapter 5: Lateral hire compensation – managing risk versus reward | 39 | |
| The challenge: determining compensation for lateral attorneys | 40 | |
| Costs of a failed lateral hire | 41 | |
| Lateral hire pitfalls | 42 | |
| Solutions to the lateral compensation conundrum | 44 | |
| Conclusion – the road ahead | 46 | |
| Chapter 6: Promoting firm goals through effective associate compensation approaches | 49 | |
| An integrated approach to associate compensation | 49 | |
| Methods of associate compensation | 50 | |
| Comments on various approaches | 51 | |
| Integrating all aspects of the associate program | 53 | |
| Partner track or contract associates | 57 | |
| Recommendations | 57 | |
| Final thoughts | 58 | |
| Chapter 7: Reward today or invest in tomorrow? Aligning partner behaviors with the long-term health of the firm | 59 | |
| Not breaking news | 59 | |
| It’s not you, it’s me | 60 | |
| Start at the end | 61 | |
| Dividing the pie | 62 | |
| The long and short of it | 63 | |
| Succeeding at succession | 64 | |
| The future starts today | 65 | |
| Chapter 8: Evolve and innovate – how law firms need to learn how to manage change | 67 | |
| Data analytics | 68 | |
| Predictive modelling | 69 | |
| Change dynamics | 70 | |
| In conclusion | 75 | |
| Chapter 9: Adopting a total reward approach to reflect different employee preferences | 77 | |
| Pathway to partnership | 77 | |
| Globalization | 78 | |
| More lateral movement | 78 | |
| A changing pay mix | 79 | |
| How to differentiate? | 79 | |
| Redesigning the total rewards offering | 83 | |
| Reaping the benefits | 87 | |
| Chapter 10: Flexible working – who benefits the most? Employer, employee, or both? | 89 | |
| The work–life balance | 90 | |
| Challenges | 92 | |
| The future | 93 |
Timothy B. Corcoran
https://www.linkedin.com/in/tcorcoran/
Senior executive. Noted speaker and columnist and the author of Corcoran's Business of Law blog
August Aquila
https://www.linkedin.com/in/augustaquila/
Internationally known speaker, consultant, and author
John Chisholm
https://www.linkedin.com/in/chisholmjohn/
Consultant, John Chisholm Consulting
Paul Lippe
https://www.linkedin.com/in/paul-lippe-49933/
Paul Lippe is the CEO of Legal OnRamp
Dan O'Day
https://www.linkedin.com/in/doday/
Vice president, sales and client services, American LegalNet
Rebecca Holdredge
https://www.linkedin.com/in/rebecca-holdredge/
Chief operating officer, Decipher
Arthur G. Greene
https://www.linkedin.com/in/arthur-greene-148b234/
Principal, Boyer Greene LLC
Simon Nash
https://www.linkedin.com/in/profilesimonnash/
Director, Insight Limited and formerly global human resources director at Carey Olsen.
Benjamin Viney
https://www.linkedin.com/in/benjamin-viney-6a9083a/
Director of talent and rewards, Willis Towers Watson
Polina Pavlova
https://www.linkedin.com/in/polina-pavlova-a5318215/
Consultant, Willis Towers Watson
Nina Gray
https://www.linkedin.com/in/nina-gray-42047717/
CEO, Gray Legal Search