Employee Bonus Plans – Options for Incentivizing a Team
January 25, 2013 Blog by: Lillian Valdez, Practice Building Consultant, American Academy of Estate Planning Attorneys+
Tagged with: Bonus • Estate Planning • Estate Planning Education • Goals • Incentivize • law firm practice management • Law Firm Systems • Legal Education • legal marketing • Lillian Valdez • Practice Building Strategy • Team
The Academy is all about systems that allow firms to be productive and efficient and therefore, profitable. One of the ways to ensure that law firm revenue goals are achieved is to incentivize staff so they also share in the firm’s continued growth and success. In fact, over the years, many Member firms have tied bonuses to performance or to a daily number revenue goal. There isn’t a “one-size-fits-all” approach for a bonus plan; every law firm is unique and the right bonus plan will focus on what’s important to them and their staff.
When setting up your own system, consider what areas you would like to see growth or improved performance. Those areas that you want to focus on are where you’ll want to set a bonus system around. Consider that each area of practice may need to have its own bonus structure. Why? If paralegals work on more than one area of the practice, you wouldn’t want to bonus them on estate planning and then have them ignore their other responsibilities because they aren’t tied to a bonus.
Here are some ideas for estate planning:
- If you want XX documents produced per month – then put that goal out there
- If you want XX signings per month – put that number out there
- If you want a Medicaid person setting up nursing home seminars – perhaps a number of Medicaid seminar attendees per month would be one of the goals for the firm
- If you want to increase endorsed seminars, then you could have a goal tied to it for a marketing coordinator or associate attorney
- If you want to increase client referrals – then you can set a goal for what percentage of new clients should provide you with at least 1 name
Some of these goals or objectives will require a team effort to complete. For example, if you have a goal of 20 new trusts a month (signed and final payment collected), then it requires a group or team effort to ensure that the goal is met. You can set up a bonus pool that everyone or some people participate in based on their responsibilities and your goals. The more they accomplish the more they earn. When all staff get the same bonus– they end up helping each other with the document, the seminar, the signing or whatever else needs to get done, because the more they get done the bigger ALL their bonuses are. This will ensure, for example, that a final signing paralegal jumps in to help the document production paralegal if necessary to make certain that the work is complete for 20 final signings to actually occur. You would need to have a particular dollar amount that you reserve for a bonus pool that everyone knows about and is in writing. They should feel like this goal is attainable but they should have to work for it, so it’s not just a handout. They also need to have a little taste of what it feels like to have the bonus money in their pocket. The more frequent the bonus is paid the more effective it is. Paying every month on the rolling average for the past three months looks after any weird odd-ball month in this effort.
If your bonus is paid quarterly be careful not to base it on a monthly goal that needs to be met for every month of the quarter. If you pay at the end of the first quarter: if they met the goal in January, then they get paid for that month; if they don’t meet the goal in February, then they don’t get anything for that month; but if they meet it in March, they get a bonus for their performance that month. This ensures that if they don’t reach the goal for one month, they continue to try and reach the goal the following month.
Also keep in mind that not all employees are motivated by money. For some the incentive might be extra time off to spend with their kids while they’re on vacation OR number of Fridays that they get off of work during the summer.
Practice Building Consultant
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
Tags: Bonus, Estate Planning, Estate Planning Education, Goals, Incentivize, law firm practice management, Law Firm Systems, Legal Education, legal marketing, Lillian Valdez, Practice Building Strategy, Team