Compensating your workers for their job should be a norm in every organization, whether you are making profits or not. Lawyers are some of the highest-paid professionals globally, but not all law firms understand the different remuneration models. Besides paying them, you should ensure they are well protected from job-related injuries, such as what maritime attorneys get. That is why it becomes critical to understand the top compensation models for a law firm, as explained below.
This is a common model, and it is one of the best, not only to boost the productivity of your associate attorneys but also to retain top talent for a long time. When you give your employees a bonus, they feel rewarded and appreciated. Retaining top talent in a law firm is not a joke considering the high competition in that sector. That is why you need to ensure your associate attorneys are satisfied with the bonuses you give them. Adding such bonuses to their basic salary ensures that no other employer can match that compensation. The result is a motivated workforce to push your law firm further ahead. You should not aim at treating bonuses as discretionary rewards. They play a critical role in keeping your associates working around the clock.
Using Realized Bills
One of the grave mistakes that most law firm owners commit is compensating their associates depending on their billed hours. That is wrong. If you follow this model, you will pay your employees depending on the hours you accumulate as a firm. Collection realization rates are not going down a good road, considering that most law companies today struggle to get paid for their services. This is the main reason why you should never compensate your people using the billed hours.
If you use billed hours for compensation, your associates will be forced to bill your clients beyond their needs and financial capabilities. Yes, they will get paid, but one of the critical results of that is your firm will lose clients. Other issues that arise from overbilling include losing top talent because you will not have money to pay your employees and difficulties to survive during these economically challenging times. If you cannot keep your operations afloat, there is no need to be in the legal industry because it can be demanding financially.
A Team Building System
If you want to see your firm succeed, having a team-building system in place is one of the best things. You can use this system as a compensation model for your employees. In this model, you do not look at individual performance, rather the performance of the entire organization. You reimburse your associates depending on the firm’s financial health. Nonetheless, you should follow a specific route with this compensation technique.
Fifty percent should be a partner’s income, forty percent to go to the teams’ performance, and finally, direct the remaining ten percent to individual performance. The main aim of this compensation method is to bring your associates and partners together for productivity, realization, utilization, any non-billable job, or anything else that will push them to work as a team. The good thing about having a team-building system is that the compensation can go to just anybody as long as they perform. Such may include associates, partners, support groups, departments, and even practice groups. Just ensure that you pay them once they hit the goals you set for the teams.
Proper compensation comes with several benefits. For one, you will attain and retain top talent in the market because they will be motivated by the pay. This is why it becomes crucial to read and understand the above-explained compensation models to ensure you are on the right track with your associates, partners, and everyone else within your law firm.