2 Prerequisite and Implementation Steps For Transitioning to an Innovative Compensation Model

How do you transition from the compensation model you have now, to a compensation model that’s best for your firm? What are the specific implementation steps you’ll need to follow to ensure the transition is a success?

It starts with understanding.

A successful compensation model transition isn’t accidental

Many large firms make a common yet understandable mistake. Firm leadership decides to make radical changes –  without meeting the necessary prerequisites first.

It’s typically harmful.

These changes create an unnecessary shake-up with employees across the firm. Support teams, associates and partners are left reeling from these changes.

Isn’t that inevitable?

It is for firms who choose to skip the appropriate implementation steps. But here’s the key point.

It doesn’t have to be.

With the right approach and a bit of foresight, firms can safely transition to a compensation model that best meets the needs of the firm.

But how?

Step #1: Outline your firm’s identity

If you’re looking to transition from one compensation model to another you’ll probably want to (a.) find the model that works best for your firm and (b.) adopt that compensation model successfully with minimal disruption to your firm’s operations.

There’s a simple way to do this. You ask a question.

“What do we value most?”

Seems like a simple question doesn’t it? How can this one question help to outline your firm’s identity?

Easy.

This question sheds light on four distinct areas of your firm. The answer enables you to…

Identify your culture. Robert E. Quinn and Kim S. Cameron at the University of Michigan at Ann Arbor discovered there are four types of organizational cultures.

1. Adhocracy cultures are temporary and driven by change. They’re often characterized as “tents rather than palaces.” These firms reconfigure themselves rapidly in the face of change. They’re adaptable, flexible and creative in the face of uncertainty, ambiguity and
2. Clan cultures are family-like. There’s a focus or special emphasis placed on mentoring, nurturing and investment in the growth of those in the clan. It’s all about doing and accomplishing together. Prioritizing employee development is crucial. Viewing clients as partners essential. An emphasis on engagement, commitment and loyalty non-negotiable.
3. Hierarchy cultures follow a set structure. These firms are focused on perfection, efficiency, stability and doing things the right way. Clear lines of decision-making authority, standardized rules and procedures, control and accountability mechanisms. These are seen as the keys to success.
4. Market cultures are often utilitarian and primarily focused on results. The internal environment in market cultures is competitive, achievement-focused, and driven by outcomes and prestige. “In the words of General Patton, market organizations “are not interested in holding on to [their] positions. Let the [enemy] do that. [They] are advancing all the time, defeating the opposition, marching constantly toward the goal.“

Map your firm’s personality. The big five personality traits are predominantly viewed as the prevailing standard for individual assessment. Leaders, essentials and influential employees shape the personality of the firm.

Firms high in…

• Openness have a higher degree of intelligence and intellectual curiosity. These firms value knowledge, experience and data more than others.
• Extraversion are skilled connectors. They’re able to build relationships inside and outside their industry. Influential partners are able to connect with influencers, leaders and essentials who are able to provide these firms with a significant amount of leverage.
• Agreeableness are socially minded. There’s an emphasis on taking care of their own (employees/clients). They’re cooperative, easy to work with, polite and compassionate.
• Conscientiousness have a significant amount of self-discipline. These firms are reliable, trustworthy, organized and efficient. These firms thrive with proper planning.

Assess values in your firm. The implicit and explicit thoughts, beliefs, ethics and morals of your firm. Don’t make the common mistake of ignoring this. Of all of the details we’ve discussed so far, values have the greatest impact on any change or transition in your firm.

Why?

It’s the hardest to uncover.

Think about it.

• How many employees are eager to share these details with their employer?
• Do employees at every level in your firm feel the practice is fair? Balanced? Compassionate?
• What do your employees (e.g. support, associates and partners) value most?

Some don’t want to know.

But these are the details you’ll need to uncover to transition to an innovative yet ideal compensation model. The goal here is simple. Get detailed feedback on your employee’s values.

This is key.

The intelligence you’re able (or unable) to uncover will determine the outcome of your transition. Use internal surveys, employee reviews (via sites like Glassdoor) and one-on-one interviews to find the answer.

Step #2: Match your compensation model to your firm

Why did we focus on details like culture, personality and values? Isn’t it a waste of time to place our attention there instead of on the specific steps we need to transition?

Not at all.

The details covered in step one ensure that your transition will be successful.

How so?

The compensation model you choose needs to fit the culture, personality and values of your firm. Let’s take a look at a few compensation models.

1. Eat what you kill: In this model, compensation is determined primarily by individual performance/production. The better an individual employee performs the greater their rewards. This works well with market and hierarchy cultures where competition and conscientiousness (specifically industriousness) are encouraged.
2. The lock-step system: In this model partners are rewarded with a growing share of the firm’s profits – based almost entirely on seniority. The ideal environment for this compensation model follows the hierarchy model. The firm’s personality is high on conscientiousness (specifically orderliness) and low on openness. Employees are comfortable with the established rules and norms already in place.
3. The team building system: In this model, individual contributions take a backseat to the firm’s performance as a whole. With the team-building system, 50 percent of a partner’s compensation relies exclusively on how well the firm does financially. This compensation model works well with clan cultures that are high in trait agreeableness, high in openness and high in extraversion. The focus isn’t on the individual, it’s on the team.

See what I mean?

This is the issue many firms run into. They shoehorn the wrong compensation model into an incompatible environment.

The results are devastating.

Employees reject the new norms. Firms lose top tier talent to competitors and partners rebel against new mandates put in place by management.

Understanding is 70 percent of the work.

When you know your firm and your team finding and implementing the right model is simple and straightforward. There are really only two steps you’ll need to follow.

1. Change the culture, personality and values of your firm.
2. Choose the compensation model that fits the culture, personality and values of your firm.

That’s it.

See why understanding is 70 percent of the work?

It’s perfect, then!

Not quite. There are a few basic truths you’ll need to remember, regardless of the compensation model you choose.

• Some of your employees and partners will be unhappy regardless of what you choose to do
• Tie your compensation model to your firm’s identity and meeting goals become easy
• Give your team the opportunity to buy-in (even if they don’t have control) and acceptance rates go up
• Attempt to force, bully or tyrannize your team and attrition rates skyrocket. Include those who are affected by the change
• Make these changes simple, easy and enjoyable to increase widespread adoption

See the difference?

This is how you transition to a new compensation model

The prerequisite steps for a successful transition?

Understanding.

The implementation steps you’ll need to follow to transition to a new compensation model successfully?

Matchmaking (or change if you’re unhappy with the environment in your firm).

This is how you do it.

Many large firms make a common yet understandable mistake. Leadership decides to make a radical, firm-wide change without meeting the necessary prerequisites first.

Why shake things up unnecessarily?

Follow the simple, two-step process we’ve outlined and you’ll have the know-how you need to make important fundamental changes to your firm’s compensation model.

The 2019 ABA Techshow is coming.

If you’re like most legal professionals, you have a lot of work to do. Deadlines to meet, clients to serve. You can’t be bothered to attend a conference like this.

But you should attend.

The Techshow is the event for solo and small firm practitioners to attend. Here’s why.

Reason #1 to Attend the ABATechshow: Small firms struggle to work on the right things

It’s a trap that’s easy to fall into.

You work hard to attract and win new clients. Then, once you’ve won them over, you do your very best to take good care of them. Naturally, you do an exceptional job. You’re a professional after all, it’s what professionals do.

Most solo and small firm owners fall into the trap of working in their business rather than on their business. As it turns out, you need both. When I say working in/on your business what does that mean, specifically?

• Working in your business refers to client work. Writing, drafting pleadings, appearing in court, negotiating on behalf of your clients, etc. The work your clients pay you for.
• Working on your business is the subtle business development work that builds your business. It’s creating a marketing funnel, negotiating joint venture partnerships, appearing on podcasts or writing books.

Most solo and small firms are lopsided.

The vast majority of firms rely on referrals which they’re not sure how to systematize. They’re not sure how to remove themselves from their business adequately so they create traps for themselves.

• They struggle to get clients, going through feast and famine cycles or
• They struggle with burnout as they attract more clients and more work

This is why you need the ABA Techshow. When it comes to working in your business, you’re probably already an expert. Attending the Techshow is a chance for you to supercharge your work on your business. It’s an opportunity for you to build relationships with key influencers, identify new potential partners and more.

Reason #2 to Attend the ABATechshow: Find software power-ups for your law firm

Attorneys, paralegals and support teams are under a significant amount of pressure. They’re hard pressed to squeeze out more billable time. They’re expected to accomplish more work in less time.

It’s a struggle.

Most attorneys are lucky if they’re able to get three hours of billable work done each day. The majority of attorneys lose six to eight hours of their day to non-billable work.

Is there a solution?

Any solution to the long list of problems you’re already struggling with?

Absolutely.

There’s a very good chance that there’s at least one person with a solution for each of your problems. Here’s why that’s so significant.

They’re grouped together.

There’s a long list of speakers, influencers, vendors, software and solutions to the issues that keep you up at night. You have access to a condensed list of providers who are more than willing to help you solve your firm’s most pressing issues.

Software power-ups if you will.

Tools that empower the employees in your firm. Where every person accomplishes the work of five to ten people in less time. Tools that improve your firm’s performance (e.g. productivity, utilization, realization).

Skeptical?

You should be. Attending the Techshow gives you a chance to collect evidence from providers directly. You’ll be able to test and vet the tools and software that solves your problems.

The ABA Techshow is your chance to pull ahead

The Techshow is the event for solo and small firm practitioners to attend. If you’re like most legal professionals you have a lot of work to do. Deadlines to meet, clients to serve. It’s a conference that can produce extraordinary results for your firm.

But, only if you have the right approach.

Most solo/small firms work in their business, but very few work on their business. The ABA Techshow is your chance to improve both. It’s your chance to find the software and tools that will improve your business and increase your revenue.

If you already have plans to attend the ABA Techshow at the end of February, come find the Bill4Time team at Booth 930!

What makes a paralegal indispensable?

It isn’t hard work specifically, though that’s an important component of the job. If you’re a paralegal you already know how hard you work.

Your firm knows it too.

You’re worth every penny (and more) to your firm. Yet, many paralegals feel they aren’t viewed as the indispensable producers they are. How do you change that? How do you get your firm to treat you as the valuable teammate you are?

The thorny strategy many paralegals ignore

Your job is tough.

No doubt about it. You perform many of the same duties and functions attorneys in your firm perform, but you do it for less pay. It’s not because you’re incapable. Many paralegals know the law better than many other attorneys.

Take Tab Artis.

Artis started off as a paralegal. He sat for the California Bar Exam – without having attended law school. Between November 1997 and November 2007, only eight people had taken the California Bar Exam without a law degree and passed on the first try.

Artis was one of those eight people.

Paralegals are hardworking, capable and proficient at what they do. However, these ingredients alone won’t make you indispensable. These ingredients are the starting point.

They’re the foundation.

Here are the three ingredients you’ll need to become an indispensable paralegal.

Ingredient #1: You solve problems in (at least) one of three ways

You already know it.

Problem-solving is a fundamental part of a paralegal’s job. What you may not know is this. How you go about solving problems for your firm matters just as much as the solution itself. There are three ways to solve problems effectively at your firm.

1. You develop the ability to solve a problem, any problem immediately or at the very least, faster than anyone else in your firm.
2. You solve problems in such a precise or complete way that these specific problems are permanently and completely fixed (e.g. recommending a process, tool or battle-tested approach that fixes billable leakage or time tracking issues permanently).
3. This is as obvious as it sounds. You consistently solve simple, complex and recurring problems cheaply.

The core values here?

This needs to be done consistently. The results should be incredible yet routine. You want to spoil your firm with your outstanding performance because this is the key that produces dependence.

It gets better.

Do one of these consistently and you become indispensable (over a long period of time). Do two of these and you become indispensable in a much shorter period of time.

Ingredient #2: Specialize in a tangential niche

You’re probably already a specialist.

If you’re a paralegal you probably have a specialty. Some specialize in a specific practice area (e.g. tax, estate, bankruptcy or corporate law). Others specialize by bringing more experience or education to the table.

That’s not what I’m talking about.

The specialization I’m talking about is more foundational. It’s something that flows directly from your personality. I’m talking about your social gifts. In The Tipping Point, Malcolm Gladwell points out several types of people with rare and unique social gifts.

• Connectors are the paralegals who seem to know anyone and everyone. Saying they know lots of people is an understatement. They’re in the habit of creating or making introductions and connecting with people up and down the status chain. Drop them off in a new city and these connectors will have hundreds of new friends by nightfall.
• Mavens are information specialists who collect, harvest and share new information. These paralegals have a deep set of t-shaped knowledge and are almost “pathologically helpful.” A maven uses their incredibly deep reservoir of knowledge to solve other people’s problems, usually by solving their own.
• Salesmen are charismatic persuaders with a knack for negotiation. These paralegals are adept at getting others to agree with and believe in them. They’re also great at gaining access to incredibly difficult to reach people or places.

These skills are extremely valuable.

Why?

They’re extremely difficult to find in the general population. The vast majority of people simply don’t want to do the work involved to cultivate these skills and tendencies.

But this is the secret.

This is how you become indispensable to your firm. It’s also how you consistently command an above average salary in a highly competitive market. Master these skills and you can write your own ticket. Eventually, you’re simply too valuable for your firm to lose.

Ingredient #3: Say Yes to the impossible

Partners often ask for the impossible. Their demands are often times, foolish, ridiculous and unrealistic. Often times they don’t know what it takes to do what they want.

Which is exactly why you should say Yes…

… With conditions. The jaded or mistreated paralegal often responds to these requests with an emphatic “That’s not my job!” That’s not what your boss wants to hear.  You know it, I know it.

So you add conditions to your Yes.

• “I’m supposed to be doing X; did you want me to drop that and focus on Y?”
• “I can get it done if I have X, Y and Do you want me to talk to purchasing about getting that?”
• “Let me give it a shot. X could prevent me from getting it done but I’d like to try and work around it. Is that alright?”
• “Would you give me a day or two to figure out how to do this right?”

See what I mean?

These answers show you’re loyal, committed and at the very least, always willing to try. When you set the tone for this kind of behavior you’re building trust in your firm. Here’s an important bonus. When you tell the partners No, They’re far more likely to trust your judgment.

“Moriah rarely says no. If you get a No, you can be sure there’s a very good reason.”

Most paralegals ignore this, because they don’t know

You’re worth every penny (and more) to your firm. Yet, many paralegals feel they aren’t viewed as the indispensable producers they actually are. How do you change that? How do you get your firm to treat you as the valuable teammate you are?

The secret is out.

This post shows paralegals a simple strategy you can use to become indispensable to your firm.

This is how you do it.

This is how you consistently command an above average salary in a cut-throat and highly competitive market. Master these skills and you can write your own ticket. You’re simply too valuable for your firm to lose to a competitor.

All it takes is practice.

With consistent effort and a focus on providing the right kind of value, your firm will realize the truth. You’re the indispensable paralegal they desperately need.