Compensation: What Makes Attorneys Happy? (PartIII)
As promised, our series on What Makes Attorneys Happy concludes with this piece discussing compensation. While not always at the top of the list, income is an integral part of why attorneys choose to stay with a firm. Being fortunate to glean information from both firms and attorneys, we understand there are many considerations and each situation is different, but here are the current themes.
Fair market value is a fitting phrase attorneys use when they are receiving competitive wages and needless to say, is a critical starting point for retaining attorneys. Fair market value takes into consideration the variances in a firm’s size and location, as well as well as lawyers’ level of experience, billable hours, and other determining factors. While some people relate to the more defined, lockstep program, more often, we speak to Associates who want to be paid and promoted via a transparent compensation structure that measures their merit and unique contributions. With pressure to generate new business becoming increasingly pronounced, attorneys value being at firms that reward them for their originated business and concurrently, provide an incentive for their efforts.
As attorneys progress through their careers, they naturally seek financial reward and greater career recognition for their evolving skills, years in practice, and business generated. Those firms that compensate their attorneys’ growth and achievements have higher retention.
There is a shift toward open compensation (more objective criteria) versus the more traditional, closed compensation structures. Of course, there are variations to both and each firm has unique circumstances that affect its business model; however, a growing number of attorneys are seeking firms with open compensation structures, with the belief this provides clearer, attainable goals and hence, a more equitable compensation arrangement.