Please sir… Can I have some more?

At a recent Legal firms summit we found ourselves in conversation with a number of managing partners from legal firms discussing what’s likely to happen through the course of the next series of appraisals and pay reviews.

With the announcement of some firms putting a £60,000 price tag on qualified lawyers there is clearly some peer pressure to increase the pay of these valuable individuals. However, there has to be a limit on what firms can actually afford because driving up newly qualified salaries to this kind of eye watering figures for most mid tier firms is simply unaffordable. So there needs to be a reassessment of expectation in certain circumstances.

Newly qualified’s are not senior associates. They simply cannot run matters on their own in most cases and deliver the kind of quality of work you need, with the experience that can only be developed over a number of years. Furthermore, firms know that when they raise the newly qualified salaries there is a ‘knock on’ impact to everybody else further up the food chain… until you get partners, who are thinking… unless we pass this on to clients it’s coming out of our profits !

So for many firms, there may be a need to reset expectation for many of the staff who have aspirations to climb through the ranks with large increases in salary. One of the fascinating sessions at the Summit was delivered by Henry Rose-Lee (an intergenerational expert) who picked apart all the mysteries of Gen Z and Millennials and many people were surprised at the fact that, while millennials may want to save the planet, and are not necessarily driven in the same way as Generation X, they are very much money motivated like their predecessors before them.

Performance

One of the tough challenges for most firms is how accurate the appraisal process actually is at delivering an objective measure of performance.  Even the biggest firms are sometimes prone to letting it be known that “performance ratings should follow a normal distribution curve in the department…” and so you simply can’t have more than one person in your department being excellent. But is this really true? If you have an excellent leader who mentors, coaches and develops their team to create a brilliant group of people who are genuinely all high performing because they want to support great leadership?

The combination of the threat that newly qualified staff may join a competitor (leaving their old firm without a suitable funnel of associates in the future), combined with poorly stratified staff by performance in later years, is a recipe for poor profitability.

What can be done?

There are a number of key actions you can take and it begins with a focus on process:

Firstly, ensure the appraisal process is simple, focuses on development of the individual and clarifies their performance so they know what must be done to improve. Feedback during matters needs to be prompt and action oriented for improvement, so the individual knows what to do differently. The appraisal just summarises what they already now.

Second, have a robust process that is 100% homogenous across the firm so that a ‘grade 2 in one department is the same as a 2 in another. Each partner needs to be crystal clear about expectations from staff.

Third, ensure people are clear about their pathway in the future, talk about expectations – in terms of work and salary because everyone needs clarity.

theGrogroup have helped a number of organisations simplify complex systems and build the quality of more simple systems so that the senior leaders can manage performance in a systematic and consistent way.

Drop us a line if you would like to learn more on hello@thegrogroup.com