Collaboration and Compensation (Part 1)

This article was originally published in the September 2014 issue of Edge International Communiqué.

Collaboration-evaluation tools can help law firms improve teamwork outcomes
A senior executive in a large U.S. law firm recently sent me a challenging question to which the partners wanted answers: “Is there any proof that collaboration and teamwork improve a law firm’s performance?” I sent the question to my colleagues at Edge and you could practically hear them muttering in their morning coffee across the countries we serve. The answers I got included “Are they serious? Of course it improves!” and “The corporate world is so convinced of this that their businesses have been working in teams for years.”

I had to admit that it was a tough question. “Compared to what?” would be one response. There is no clear-cut empirical answer for law firms. To reframe the question: “Can we measure collaboration, demonstrate that it improves performance, and then reward it?” I believe that (1) good collaboration measurements exist; and (2) compensation systems can be tweaked to promote collaboration even when individualism is the reigning mode in lawyers’ business development.

Business Development Collaboration Measurements

Two kinds of collaboration should be measured: (i) collaboration in business development, and (ii) internal teamwork in getting quality work done. In this article, I suggest some business development measurements.

A firm should measure both efforts and results. In preparation for annual self-appraisals and compensation interviews, partners should track this data throughout the year. Some examples are:

• Cross-referrals of existing clients to other practice groups (number made, number that lead to new revenue);
• Referral of new business prospects outside of your expertise or geographical location (and how many lead to new engagements);
• Participation in RFP responses and pitches (and success record);
• Joint speaking events and collaborative CLE offerings to clients, prospects or industry;
• Collaborative writing for publications (e.g., with an associate);
• Frequency of taking on a mentoring or buddy role for lateral senior lawyers; and
• Initiatives in forming cross-group teams to pitch new business to existing clients (without waiting for an RFP); success of those efforts.

This record keeping will only be effective if the marketing department provides forms and easy ways of “looking back,” because many lawyers will do the tracking only in the last month. Nevertheless, the individual lawyers should be responsible for keeping the data and reporting in table form at year-end.

Going back to our doubting law firm, imagine if they had promoted collection of this data for two years and then correlated high collaboration to the financial performance and business prospects of those teams?

Next month, we’ll explore how to measure internal teamwork and how to assess these subjective factors in compensation.

David Cruickshank advises firms on talent development, leadership and compensation.