How to motivate your fee earners? It’s a big question and one that is perhaps the key to success in a law firm.

A key factor I come across again and again in law firms is a lack of openness. Partners too often appear to feel that as it is their money at risk the staff have no business knowing how the firm is doing; it’s a private matter. The result is that staff feel un-trusted and unmotivated. And yet they in fact have just as much desire to be a part of a successful business as the partners have. They want secure, well-paid jobs and they want to be known for working in a successful, respected organization. Bring them into the loop and you will be well rewarded. They will respond and work hard for the success of your firm. To use modern jargon, they are all “stakeholders” and they all want to work in a winning organization.

The first thing to get in place is involvement. The more we all feel we matter, the more we feel that we are wanted and our opinions are listened to, the harder we try. Human nature is something we must work with and understanding it is vital.

So…..get talking with all your people. Involve them with regular departmental meetings and then make sure that things are DONE. Encourage them to come forward with ideas and then to get involved in implementing them.

The biggest failing in this profession, the thing that holds firms back more than anything else, is that lawyers are always too busy. As a result they get dragged off onto client work and do not follow up on decisions taken. Be honest! How often have you sat in a partners’ meeting and heard someone say that they are sorry but they have simply not had time to do something they agreed to do last month. How often have to looked at someone’s appraisal from last year and seen that clearly agreed, logical steps have been left undone.

All this saps your people’s confidence. They begin to think that it doesn’t matter, that whatever we decide will make no difference – nothing will happen, nothing will change. Inertia and despondency set in and people stop trying.

But the very opposite effect can be achieved. When we feel encouraged we really believe that the effort is worthwhile. We want to be part of a success story and although we hope that it will benefit us in the long term we are seldom greedy. Incentive payments will help here but more important is the good feeling we get when we are contributing to a success, when we are working as part of a team in which we can achieve more together than the sum of our separate efforts.

So, what to actually DO? Try these:

1) Communicate! Tell all your people what the firm is trying to achieve and what standards you want to set for client service. Measure as much as you can so that it can be monitored and look constantly for improvements. People respond best when they know what they are part of and what it is all about.

2) Involve! Make sure that your FEs, and indeed all your staff, understand exactly what part you want them to play in your organization, and just how much they need to achieve personally. When we work in a vacuum we are uncertain and hesitant, never being quite sure whether what we are doing is right and what the boss wants. When we are clear we can forge ahead, confidently dealing with our work secure in the knowledge that it is the right thing to be doing and that we are handling the work and our clients in the way that is required.

3) Reward! Performance bonuses do motivate and if you can appear generous they will work even better. The rough rule-of-thumb that a fee earner should bill three times their salary remains a good guide. Under this thinking one-third of bills delivered pays the salary, one-third covers overheads and the final third creates profit for the partners, the shareholders in the business. Once a fee earner’s bills exceed three times their salary two key elements in this – salary and overheads - have been met, meaning that all their further billing turns into profit. Two thoughts now come to play. Anything you can do to encourage this to happen will be great for the partnership, and as by now the FE is rewarding partners handsomely it is only reasonable to return the favour and reward the FE. Be generous! Paying perhaps 25% or 30% of bills delivered past this threshold will be highly motivating.

4) Avoid the temptation to feel slightly aggrieved if an FE does well out of this and just think what the firm is gaining. You are getting a superb contribution to profits, but equally you are gaining the loyalty of a key fee earner. They will be less likely to change jobs if their financial rewards are good.

5) BUT…build in some safeguards. Monitor WIP and make it a rule that you can adjust any bonus payment if you see anything odd. You don’t want to have to pay out a big lump of money to a FE who has stripped his WIP and billed everything in sight in one quarter, for example, thus triggering a significant bonus payment but accepting that he will be well below target in the following quarter. You need to retain a “fair play” element in he scheme you choose but at the same time never appear mean in its interpretation. You are trying to motivate here.

6) A time lag is also a good idea. Quarterly payments are a good balance between admin and motivation. Too infrequent and you lose some motivation, too often and someone is forever having to work them out. And if you pay a quarter’s bonus at the end of the following quarter, with the clear proviso that it is only paid if the FE is still with the firm and not under notice to leave, given or received, and if your employment contracts require three months minimum notice, you have a subtle but neat disincentive for any FE to leave. In practice you will never have to pay a bonus for someone’s final quarter with your firm and if nothing else that money can go towards meeting the recruitment agency’s fee for finding a replacement!

7) Only pay bonuses on cash received, not on bills delivered. You do not want to be paying out on something that turns out to be a bad debt. In practice, it is often the most straightforward simply to pay on the cash received figure, but if not make sure you adjust for any write-offs or bad debts.

8) There are many ways to measure performance. You can easily work out how much an FE contributes per hour (bills delivered divided by hours worked), what their average chargeable hours figures show per day or per week, what percentage of their fees are lost in bad debts, or anything else you might find useful. Again, involve them in the results and encourage them to set targets for improvement. One rather neat method is to work out their weekly cost in salary and overhead, which is their “base” figure for billing, give them that figure and ask them to keep a running tally of bills produced. The challenge is to see at what time and on what day they pass the base point. If they can see it being passed by, say, midday on a Thursday, they will feel they are really getting somewhere. Your challenge as manager is to get bills produced in volume throughout the month and not all being left until the last two days.

9) Finally, listen! Your FEs are at the coalface. Encourage them to come forward with ideas and be willing to take them on board. If it means investing some money do the usual cost:benefit analysis and if possible go with it. As it is coming from someone actually doing the work the recommendation will probably be a good one, and if they see you as progressive and willing to listen and take action on what they are telling you it will be highly motivating for them as well.