Uncertainty makes planning an incredibly stressful guessing game. It’s one of the biggest reasons why my firm’s payroll is 100% variable.
When times are good, I earn more, I sleep better, and I’m a pleasant guy to be around. When times are bad, I don’t earn as much, but I never have to dig into my profits to compensate underperforming associates.
Variable pay is a massive incentive for your employees. The better they perform, and the more clients they sign, the more they (and you) earn.
Now, transitioning to variable pay didn’t happen overnight. I dealt with employee fear, listened to rants and tantrums, and said goodbye to a few resistant lawyers.
Getting to the other side is well worth the small struggles. You’ll be happier, stress less, and sleep better at night. These are the nine steps I took to make the switch—improved upon after learning a few lessons along the way.