We’ve spent years tweaking our lawyer compensation system.

It’s working.

It achieves the desired behaviors at a reasonable cost. The lawyers win when the firm wins. The firm wins when the lawyers win. The system aligns the interest of the lawyers with the interest of the firm.

It didn’t always work that way.

When we started, we had components of the system that distracted us from achieving the win/win we sought.

We had to tweak the system to get things working properly.

When I mention compensation system “tweaks” to law firm managers, they usually get excited. They whip out spreadsheets and have all kinds of ideas for how to make their system work better.

Spreadsheets have a place. However, they’re not necessary for designing an effective compensation system. In fact, spreadsheets can become counterproductive in this situation.

How to Achieve a Win-Win With Your System

I’ve found that the best tweaks are the ones that make things simpler. When the system gets complicated, it tends to break down. Spreadsheets shouldn’t be required.

For us, our tweaks have all involved eliminating complexity. For example:

• We previously factored our client survey responses into the system. We eliminated that factor.
• We previously paid a base salary and awarded bonuses on top of the base. We simplified by eliminating the base.
• We used to pay some of the commission over the short-term and some of it at the end of the year. Again, we simplified, and it’s all paid immediately.

Simplicity is the key. People need to quickly and powerfully feel the impact of the compensation system if it’s going to induce the desired behavior.

For a compensation system to have the desired impact, it must immediately have an impact on the paycheck. If a lawyer can’t easily connect behavior this week with the paycheck next week, then you’re not going to get the change in behavior you seek.

You’re going to need to tweak your compensation system. Just make sure the tweaks result in a simpler, faster, and easier approach. That’s the path to getting everyone in alignment and achieving the business goals.