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“Given the difficulties in attracting and retaining quality staff, implementing a bonus scheme might seem a good idea, but it needs careful consideration.”
Many legal aid lawyers look incredulously at the salaries of trainees and newly qualified solicitors in the City and realise that even at the height of their earning powers they are not going to match them. As a sector, serious questions need to be asked about the viability of legal aid work. What are people doing to attract and retain quality staff?
It is not easy to say what salaries are being paid as this information is jealously guarded. Young Legal Aid Lawyers’ ironically titled blog, ‘A view from the gravy train’, has examples of very modest salaries, but practices also employ other methods for recruiting and holding on to staff, such as bonuses. Given the difficulties across the sector in attracting and retaining quality staff, implementing a bonus scheme might seem a good idea, but it needs careful consideration.
On a recent training course we ran (the LAPG Certificate in Practice Management), bonuses were the subject of a lively discussion. One participant had a matrix that enabled a fee earner’s success to be assessed based on billing and other criteria, eg successful innovative cases, marketing events, developing internal systems etc, and then the agreed part of the firm’s profit would be apportioned accordingly.
We do not know how prevalent bonus schemes are. We emailed a few senior solicitors and practice managers to see what they do. One said:
Bonus schemes … often incentivise and provide a useful mechanism to reward achievement. A good bonus scheme can be attractive when recruiting and assist with staff retention. However, the wrong type … can be counterproductive … and very careful consideration should be given to the possible effects, positive or otherwise, that introducing a bonus scheme might have on your organisation.
One contentious issue was whether bonuses should be paid to individuals or to a team or whole practice including non-feeearning staff.
An individual bonus would arguably be easier to administer, and possibly fairer: if one person wants to work long hours and brings in lots more income than another, who wants to work office hours so he or she has some quality of life outside the workplace, surely that is fair? But aside from discrimination issues, other problems might also arise.
Would fee earners cherry-pick the types of cases that they took on? Would that distort the workload and would it match the practice’s objectives? Would there be tension between fee earners as they battled to get the pick of the cases?
Billing could also be problematic. How could you stop fee earners amassing a lot of billing in one computation period so they got a bonus that year but then having low billing the next year, or carrying forward billing by billing slowly? Would there be a distortion in making claims for payments on account?
Another respondent’s scheme operates based on targets:
If the department hits target then at the end of the year the fee earners get a bonus of between £500–£5,000 depending on whether they are a partner, assistant, solicitor or clerk. If the whole firm makes target then all the administrative staff get a £500 bonus. We do pay ad hoc bonuses too, for example when an individual bills well.
Targets don’t always work well, though. A different manager had had a problem whereby those exceeding their targets would often be outnumbered by those who did not. The organisation as a whole would then miss its targets, resulting in a negative bottom line, but it would still have to pay bonuses to the high achievers. After taking legal advice, conducting a firm-wide consultation and amending all employment contracts, a new scheme was implemented:
We now have a bonus scheme that requires the firm as a whole to be in profit (as per year end accounts) before anyone qualifies for consideration for a bonus, and then for the entire team to meet their target before a bonus is payable. The amount of bonus payable is based not only on the amount of fees brought in by the individual (still the main consideration) but also on other contributions made to the firm, marketing initiatives, management roles etc. [Non-fee-earning staff] also receive a bonus when the organisation’s targets are exceeded.
When asked if this worked better, the manager replied:
All in all this has proved to be a huge improvement on the old scheme. The downside is that a high performing fee earner could fail to receive a bonus because another member of the team failed to meet their target. This could prove divisive and you might also find yourself demoralising a high performing fee earner.
Remember, once a scheme is introduced you must adhere to its rules strictly or open up the possibility of allegations of discrimination. That being said, on balance, the new system works a lot better than the old scheme and has contributed to the increase in performance of the firm as a whole.
Does a bonus scheme suit your organisation? Can you use traditional pay rises as a means of rewarding high performance on an individual basis? Is a Christmas bonus an easier way to tackle performance? Bonuses might seem a good way to attract, retain and motivate good staff but, as seen above, careful thought needs to be given to the structure of the scheme, any unintended consequences and ensuring compliance with discrimination requirements. ■