In some law firms when a lawyer becomes an Associate or Partner they are allocated more FirmTime™ in their WorkPlan™ for performing increasing aspects of their changed role, such as greater supervision and training of other less experienced team members.
They might also be allocated more FirmTime™ for Business Development.
Unless the total time allocated in the WorkPlan™ increases, and it seldom does, the amount of time allocated for ClientTime™ reduces as a consequence, and so does annual fee budget, unless the WorkPlan™ reflects a belief that the new Associate or Partner will be able to recover the same or greater fees than before.
The reality is that very often annual fee target is reduced.
Some firms have incentive schemes under which team members are paid a bonus if they achieve their annual fee target, and in some cases that bonus increases in an agreed relationship to the amount of fees above budget.
Different permutations are found throughout the Profession, and some work much better than others.
One issue that needs to be watched closely is management making sure that the FirmTime™ allocated as described above is actually invested, and effectively.
I regularly see situations in which the extra FirmTime™ allocated is not used at all, often because the newly promoted team member does not have skills in Business Development, and does not invest sufficient time to acquire them. Examples of team members having a strong dislike of Business Development are rife.
What can happen is that the team member simply continues to invest around the same level of time into ClientTime™ as they did before, and will thus quite easily exceed their new budget.
Management must remain aware that far from being a “star”, generating exceptional fees relative to budget, the team member is actually not carrying out their new role correctly.
This is especially likely if the team member was an over-achiever before in the fees area, and that was a big part of the reason they were promoted!
Early discussion needs to take place to start work on re-directing effort into the relevant aspects of the role in correct proportions.
It would be a serious mistake to allow the team member to earn a larger bonus by failing to do what was intended, and generate “excessive” fees as a result.
Whether a firm has an incentive scheme or not, failing to manage investment of resources properly is a major area of concern.
It should be noted that along with inadequate ongoing management, the design of the incentive scheme may in itself be unsophisticated, and in many cases encourage the wrong behaviour entirely.
In my observation, over more than 47 years now, many incentive schemes are fairly blunt instruments, designed in an attempt to give team members additional incentive to do what they should be doing anyway as a basic requirement of their job and base remuneration.
The incentive scheme is often a very poor substitute for good planning and people management, within a good culture, and rarely works successfully across the firm.
I prefer additional ad hoc, considered but unexpected, reward for rounded super-performance above and beyond expectations.