If you’re compensation plan isn’t aligned with the law firm strategy, then a compensation plan is the firm strategy.
That’s according to Tim Corcoran in this interview with Lee Pacchia on Mimesis Law. Mr. Corcoran noted while he didn’t coin that witty phrase – it’s a great way to explain what he means by “strategy aligned compensation plans.”
Mr. Corcoran, who pens Corcoran’s Business of Law blog, is a principal with Principal with Corcoran Consulting Group, and 2014 president of the Legal Marketing Association, says there are some unique trends emerging that make compensation plans especially relevant this year.
First, the “gap between the haves and have nots” has grown. For example, some lawyers may not remain equity partners and high performers who “have options and can move elsewhere.” In addition he notes a discrepancy between what law firms say they want from partners and “what they paying for.”
The solution, according to Mr. Corcoran is to have a “clear, consistent, transparent plan that’s based on real data.” The full interview, which is embedded nearby, runs just 9:24 and is worth watching in its entirety.
Compensation and Law Firm Business Development
Those readers that find this interview interesting might also find an article Mr. Corcoran published on his blog in September interesting as well: Linking Business Development to Partner Compensation. In that post he outlines a common challenge he find in compensation plans, which expect:
“…exceptional behaviors such as new matter origination, high leverage, high utilization of billable hours, inbound and outbound cross-selling, mentoring of young lawyers, firm or practice group management, pro bono activities, matter profitability, high billing and collection realization, expense management, marketing and business development activities, and more. In reality, successful teams are composed of players with different and complementary skill sets and a good compensation plan should recognize and reward different contributions. In a well-designed plan, partners are able to maximize compensation by maximizing their particular and unique skill sets.”
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What are the key challenges you see with compensation plans? What impact has the economic climate had on compensation plans? Amid what appears to be a revival in law firm confidence, what steps should law firms take now to prepare for 2015?
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