MS Legal Search founder consulted for Law360 News Article entitled, “How to Score a Major Bonus from Your Firm.”
How To Score A Major Bonus From Your Firm
By Erin Coe
Law360, New York (September 28, 2010) — As law firms pay closer attention to their bottom line, it’s more important than ever for young attorneys to take proactive steps if they want to pull in a hefty bonus, experts say.
While most firms are still tying bonuses to billable hour targets, some are starting to look atcompensation in a broader context, and many associates are going to have to put theirgame face on and do much more than clock in a set number of hours to bring home a bonus, according to experts.
Bonuses remain a “fraught subject” at law firms, according to Gary Klein, founder of legal search firm Klein Landau & Romm Inc.
“In many law firms, bonuses are considered ‘You’re still employed,’ ” he said. “With tens of thousands of lawyers out of work, it would be remarkably rambunctious of an associate to raise bonuses in a conversation with partners.”
Meeting billable-hour objectives is a key factor for associates to be considered for a bonus, but they may have to go above the call of duty to receive one, according to Klein.
“Working hard and producing revenues aren’t what they used to be in terms of the bonus matrix,” he said. “In order to stand out now, perhaps senior associates need to become rainmakers. That changes the equation in their favor.”
Instead of basing bonuses solely on billable hours, firms would be better off rewarding lawyers who are doing quality work in an efficient manner, being responsive to clients’ needs and going beyond what is expected of them, according to Cordell M. Parvin, founder of consulting service Cordell Parvin LLC.
“No one gets up in the morning and says, ‘Oh boy, I can’t wait to get more billable hours!’ ” Parvin said. “It’s not a motivator.”
While many firms are still concentrating on making money through billable hours, some firms are starting to transition to generating revenue through billable hours and alternative billing arrangements, which present lawyers with new opportunities to shine and be rewarded, according to Terri Mottershead, principal of Mottershead Consulting.
“We are seeing a movement away from bonuses tied solely to the billable hour and a new focus on individual performance,” she said. “The big drivers toward that are different business models that law firms are looking at now and a move toward alternative fee arrangements, which are about people working effectively and efficiently to produce profitability that is going to sustain law firms.”
For lawyers seeking out a big bonus, they need to know what their firm values, what drives bonus decisions and how the various factors are measured, according to experts.
“The bonus you get is all about exceeding expectations,” Mottershead said. “If you want to get a big bonus, you must know what a firm’s expectations are to exceed them and to be a top performer.”
While associates can surpass expectations by going above billable hour targets, they can also stand out by going out of their way to please clients and bringing a heightened level of support to partners, Mottershead said.
Other criteria firms may consider include a lawyer’s business and professional development, contribution to the community, teamwork, profitability, and people and project management, she said.
“Bonuses are increasingly being paid for a combination of individual contribution, contribution to a team and contribution to the firm, so it is unlikely you will receive a major bonus if your only focus is your own work to the exclusion of all else,” she said.
Lawyers can also win recognition by being thorough in their work and going the extra mile to get the job done, said Parvin, who recalled one superstar associate from his former law firm Jenkens & Gilchrist PC who pulled more all-nighters in his first two years practicing law than Parvin had during his entire law career of more than 30 years.
“When this associate was assigned a project, he dug deeper than any of the other lawyers,” Parvin said. “He ended up with lots of hours, but if I had had a say, I would have given him a bonus based on the quality of his work product, as well as his depth and understanding of a case.”
Lawyers also need to stop making excuses for themselves and start forming relationships with clients much sooner, according to Parvin.
“Because associates have bought into excuses like, ‘I’m too young, I’m too inexperienced, I don’t have gray hair,’ they tend to start building relationships later than they should,” he said. “With blogging and social media, young lawyers can stand out from the crowd at an earlier stage in their career than before.”
When it’s time to consider who should receive a bonus, partners are going to remember the associates who are making themselves indispensable to the firm by anticipating partners’ needs, having a can-do attitude and producing high-quality work, according to Elaine Makris Williams, president and founder of MS Legal Search LLC.
“If associates help make partners’ lives easier, that means partners can either go after additional business or focus on higher-level work that they can bill at the partnership level,” she said.
In addition to getting involved with the firm by participating in committees, firm functions and volunteer opportunities, lawyers should demonstrate they are voracious learners, according to James D. Cotterman, a principal of Altman Weil Inc.
“Lawyers should not be afraid to get into new areas or expand their knowledge,” he said. “They should learn about the business of law and understand the business issues of their clients.”
Bonuses for outstanding performance and mastery of business of law competencies fit more readily with the increased use of alternate fee arrangements, Mottershead said.
“Being rewarded for getting older or for operating as an island does not work well with the need for increased efficiencies through a highly functioning team effort and outstanding project management skills, which are what alternative fee arrangements demand,” she said.
However, if alternative fee arrangements result in smaller profit margins for firms, there may be less money to go around for bonuses, according to Klein.
“It may be harder to get bonuses if the profits aren’t there,” he said.
Despite those concerns, the move away from tying bonuses to billable hours is likely to help lawyers gain critical skills sooner and prepare them for partner responsibilities, according to
Mottershead.“I think it will support lawyers to have a broader skill set earlier in their career,” she said.“When you’re churning out hours, you don’t tend to focus on anything else, but whenbonuses are based on billable hours and a number of other factors, associates can developthe skills that they are ultimately going to be judged on when they become partners.”
