There’s an old saying in management guru circles: Pay for performance, promote for potential.
Compensation models and incentive structures are among the most central issues in any business, let alone law firms. A key challenge in the professional services model, absent a professional sales force, is how to incent business development (BD)?
The matter is of critical current interest in the legal landscape as several studies suggests law firms BD is heating up amid increased competition. To that end, Brian Kennel of PeformLaw recently published an infographic on Client Origination Credit Essentials.
The infographic breaks down the key issue of origination credit among the originating attorney, billing attorney and working attorney – and offers these six considerations:
1. Money is only one component of incenting business development;
2. Sharing originations in lieu of actual business development has limited value;
3. Oversharing of client credit may mask weaknesses and crowd out potentially more talented lawyers;
4. Awarding credit to those who truly add value to the client relationship will spur growth;
5. Sharing origination credit is one concept for compensation and another for partnership and promotion;
6. It’s better to distinguish between one sharing profit for a job well done and rewarding for origination.
The infographic is embedded nearby and is this week’s Friday Share.
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