Over the past 12 months, we have observed an unusually high degree of "churn" in associate and partner movements in legal markets worldwide. In most instances, compensation has been a significant factor in these departures, although not the only one. Remote working during the pandemic has opened new opportunities for discrete lateral recruiting, with the "losing" law firm not finding out about someone's decision to leave until it is too late.
The decision whether to remain at one's current law firm or go to another firm or to a corporate legal department usually is driven by an analysis of which opportunity -- leaving or staying -- presents the better business case. As we saw in 2011-2012, as legal services markets emerged from the Global Financial Crisis, migrations of legal talent increase in times of recovery. A quick review of the legal press, with its reports of major migrations of partners, associates, and even entire practice groups, provides evidence of this trend almost every day.
Are you offering just more money or better opportunities?
So, is your law firm's compensation system ready for a more intense compensation for legal talent starting in the last two quarters of 2021 and increasing into 2022? An intelligent response to this question involves more than whether you are offering more money than your competitors, but rather whether you are offering better opportunities. This involves more than just numbers. It also requires an efficient deep-penetrating look into the systems and processes by which your firm provides incentive and reinforcements for the performance that you need.
Time is the great adversary of even the most successful compensation systems.
"Our compensation system has always worked well." Some partners view this as a sign of strength. We see it as suggesting a strategic risk.
As law firms change, so do the expectations of their lawyers. If your firm has not reviewed your lawyer compensation systems -- for partners and associates alike -- within the past ten years, your are probably trying to work with a system that might have become obsolete, no longer addressing accurately the strategic and business needs of the firm and the personal goals and expectations of your lawyers.
How we can help
Our Walker Clark Lawyer Compensation Review is an efficient deep-drilling examination of your current compensation system and structures that looks at the whole system, not just the numbers, to identify refinements and improvements that:
- Will incentivize and reinforce the actions and performance that your firm needs to continue to be successful in the future
- Will realign your compensation system to fit the expectations and aspirations of your people
- Will be affordable and straightforward to implement
- Will be perceived as fair, both in terms of its structure and its implementation
- Will present a persuasive business case for retention of your best people and your own recruiting efforts in the market for legal talent.