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YouTube Friday: Myths of Law Firm Compensation Plans

Myths of Law Firm Compensation Plans

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.”

It’s a fitting topic for the year’s end, which is at least on parity with legal industry predictions, and that’s why it’s this week’s Friday Share.

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?

Photo Credit: Flickr; Ben Sutherland; CC BY 2.0

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3 Takeaways from the Arc of Law Firm Business Development

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About Frank Strong

Frank Strong
Frank Strong is the communications director for the LexisNexis software division located on NC State’s Centennial Campus in Raleigh. In this capacity, he leads communications efforts in support of software products for law practice and law department management and also litigation tools – across large law, small law and corporate counsel segments. With more than 15 years of experience in the high-tech sector, Strong previously served as director of public relations for Vocus, which developed marketing, PR and media monitoring software. He has held multiple roles both in-house with corporations, ranging from startups to global organizations, and has also endured the rigors of billable hours, having completed gigs at PR firms including the top 10 global firm Hill & Knowlton. A veteran of two year-long deployments, Strong has concurrently served in uniform in reserve components of the military for more than 20 years, initially as an enlisted Marine and later as an infantry officer in the Army National Guard. Strong holds a BA in Film and TV production from Worcester State University, an M.A. in Public Communication from American University, and an M.B.A. from Marymount University. He is a PADI-certified Master Scuba Diver and holds a USPA "B" skydiving license.