In a recent post – Is your Partner remuneration scheme really driving performance? – we looked at the challenges many law firms face as they try to use Partner reward strategies and structures to encourage desirable behaviours and positive cultures.
But just how important is remuneration in shaping behaviour and culture? Clearly other important factors are at play – leadership for one – but there is no escaping the powerful role that money can play as a motivator.
That said, the use of reward as a force to shape behaviour and culture has to be thought through – it cannot be piecemeal, but must be employed strategically and with a long-term view.
It’s important to ask: “What behaviours are we trying to create, encourage and cement, and how can we use remuneration to help shape them?”
Those behaviours will, ultimately, define the overall corporate culture, or at least the prevailing culture amongst Partners. At a simplistic level the choice is between a culture of competition and one of collaboration and co-operation.
Either can be desirable. For a firm where the strategy is simply about driving Partner fee income, a culture based on competition between Partners is often the right choice – firms taking this route often see very strong fee growth as a result.
However, in a globalised world, the ability to operate effectively across international borders is increasingly an imperative for law firms. Clients want a single, joined up legal service whether they engage in the UK or the Far East – and that puts new pressures on overall Partner strategies.
Can the firm simply replicate a fully formed Partner base in every market and still keep everyone busy? Does every market even need the same mix of skills and disciplines all the time?
Most firms, noting the implications for short-term profitability, have come to the conclusion that the answer to both questions, at least for now, is “No”. The result is strategies based on establishing ‘specialism centres’, then making the experts within them available to clients everywhere – in other words ‘cross selling’ across borders and across disciplines.
Clearly that model poses some real challenges in terms of culture and behaviours.
After all, law firms want to support those client demands, but they want to do so in such a way as to deliver against their own growth targets. As a result, there is an increasing desire to move away from fee-focused, siloed Partner cultures – to encourage greater collaboration between Partners.
That is where remuneration can play a vital role, by rewarding the right kind of behaviours, in context with a well-communicated strategy – and therefore enabling cultural change to take hold.
To find out how this is shaping attitudes to Partner remuneration models read our latest whitepaper: The Going Rate: Create the Perfect Partner Remuneration Scheme.