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Associate Attorney Motivation

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our firm is a 14-attorney firm in Chicago. There are nine partners and five associates in the firm. Our practice is limited to insurance defense. I am one of the founders and senior partners in the firm and have been practicing for 35 years. We are having problems getting our associates to produce at the levels that we need for the firm to be profitable. We have an annual 1,800 billable hour requirement and several of our associates are not even close. We have a bonus system that pays associates a bonus based upon billable hours exceeding 1,800 billable hours. What are we doing wrong?

A. It often takes more than setting up a bonus system and then leaving it on autopilot. I am finding that the intrinsic reward of doing a good job and meeting the expectations of the firm’s partners are as important as the bonus system. In client law firms that have had similar problems we have found that by supplementing the bonus system with monthly reviews and coaching sessions with associates not meeting their targets has made the difference. Here is an outline of the process:

  1. Review you monthly billing/hours reports for all associates each month.
  2. Identify those are below targets and expectations.
  3. Meet with those associates that are below targets and expectations.
  4. Discuss why there are having problems meeting expectations. Lack of work, not working enough hours, poor time management habits, or poor timekeeping habits.
  5. Identify solutions to the above problems.
  6. Monitor and follow-up.
  7. Continue to meet every month until such time as the associate is meeting targets and expectations.

The bonus rewards those that want to push beyond the 1800 billable hours but does nothing to solve the problem of those not meeting the 1800 billable hour expectation.

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John W. Olmstead, MBA, Ph.D, CMC, (www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics and author of The Lawyers Guide to Succession Planning published by the ABA. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line newsletters. Contact John at jolmstead@olmsteadassoc.com.
 

 

Posted on April 4, 2018 by Sara Anderson
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Member Comments (2)

Perhaps you have several problem areas.  When I was a junior associate practicing in Chicago decades ago (in the insurance defense area), it was my experience that, in addition to the meeting and exceeding the substantial billable hour requirement, the partners expected the firm associates to devote considerable time to helping the partners (such as by researching and writing articles for them, by marketing the firm, etc.).  The associates never received any "billable credit" for the considerable time spent on such required, but non-billable, tasks. 

Then there were the times I was in the law library and working on my assignments when a senior partner would ask me to copy cases for his assignments (and I would spend 30-60 minutes of my time doing so).  That obviously took time away from my assignments.

Also, in those days, we were dictating work and having to share a secretary, and the partner's work always came first (even if he had later deadlines).  I found that, by the time I received a draft, it needed to be revised due to subsequent developments or conversations (or the secretary's failure to proofread).  It was frustrating and time-consuming, to say the least, to not get work finished timely.  Some secretaries were better than others.

Sometimes a partner would give an assignment late in the week and require that it be done and on his desk first thing on Monday, and I would spend all weekend working on it (and giving up any planned family time) only to have the partner not even show up for work that Monday. 

In one firm, I took the job solely for the reason that I was told that I could work from home and not have to be in the Chicago office regularly; I lived in the Western suburbs at the time.  Less than a month later, the partner changed my work schedule.  I had to be in the Chicago office daily, and I was having to travel considerable distances to outlying courthouses.  All that travel was not billable, and I had to put in even more and more hours to meet my billable hour requirement. 

I think your firm needs to talk with each associate about the hourly requirements and see why those falling short are doing so.  There is usually no shortage of assignments in the insurance defense area, so there must be other factors affecting the bottom line.  Is it a morale issue?  Is it a staffing problem?  Is there a disparate treatment situation?  Are your associates expected to do a considerable amount of non-billable tasks, for no credit? 

By the way, are the partners meeting the billing requirements, too?

 

 

Ah, today's young lawyers. We are finding that there is pushback on the number of hours our associates feel comfortable working. Today's familiies are two wage earners, unlike the good old days when I was younger and my wife's primary responsibllity was raising our children. So, unless the associate is working for one of the bigger firms and getting a very high compensation package, they will not be willing to work so many hours.

The ideal of course is to make it a condition when they are hired and explain that they will only have a future in your firm if they achieve the required hours regularly. That said, are there enough lawyers in your area to replace the non-performing ones? This is not an easy issue to deal with.

Our bonus structure is based on billed hours, not billable hours. If they meet a certain threshold, then they get a % of the excess as a bonus. The younger ones tend to make a bonus.

It was easier practing law ands running the business 30 years ago.