Start managing your firm or pay the consequences

first_img Start managing your firm or pay the consequences Is she over here? Or is he over there? Those partners, they seek them everywhere! Is she a wunderkind? Or is he just full if it? That elusive, perfect associate! LOMAS Practice Management AdvisorIt’s pretty well-recognized among firm administrators and managing partners that the hardest thing is to find good people to work for the firm. So when you have someone reliable whose work you are satisfied with, even if you think you can do better, it’s often best to find a way to keep that person around, because short retention cycles are devastating to a firm’s profitability. The Real Cost of Turnover Regardless of the position within the firm, you have the expense of advertising and interviewing a new person. Then you have to train them and hope they are not worse than the last person. Meanwhile, no matter how good someone is, there is always a learning curve in any new environment during which you’re not going to get your money’s worth. If the person is as good as you hoped, you have to worry they’re so good that they’ll soon be worth more than you are paying, and you’ll be throwing a going-away party when they get hired away. While all of this jockeying around is going on, your unemployment rates are going through the roof because they are variable. You pay between 1 percent and 5.4 percent of the first $7,000 of every employee’s salary for unemployment insurance, based on how many people you fire in every two-and-a-half year period. Let’s say you hire someone and pay them $7,000 before you get so upset over the color of their socks that you fire them. Your firm is going to pay between $70 and $378 in unemployment tax, depending on how often you do this sort of thing. To put it in a real-world context, let’s say your firm employs 11 people (two partners / three associates / six support staff). Your unemployment taxes could range anywhere from $770 to $4,158 per year. So, you fire a couple of bad hires and suddenly, instead of giving the government 1 percent ($770) in unemployment taxes, you could find yourself at the maximum rate 5.4 percent ($4,158). And it can get worse. Remember, you are paying the rate on the first $7,000 you pay to each individual. If you hired 10 people, you’d pay the calculated rate on each individual’s first $7,000. So you ask yourself: Is that loser who’s getting $30,000 really so bad it’s worth another $3,000 in unemployment taxes just to take a chance of getting someone who’s worse? Saving Money Before You Act This advice should be heeded long before you start simmering over the prospect of having to keep someone around to avoid paying higher unemployment insurance rates. Start thinking about where you want your firm to be in five years. Your strategic plan should address its client base, budget, physical facilities, use of technology, marketing, and, yes, employment strategies. Your firm’s employment strategy must support its growth plans. How many lawyers will you have on staff in five years? What services will they offer? How much staff support will be required to deliver those services efficiently? Once you have the answers to these questions, you can start to formulate a plan for how to attract, train, and keep your support staff. Here’s a hint: More money is rarely the best solution. Staff Retention If you want to retain staff in today’s job market, you’d better make sure the work is professionally satisfying. Gone are the days when you could hire someone in their late teens or early 20s and buy them a gold watch when they retired from your firm 30 years later. Today, Generation X is in the job market and Generation Y is on the way. Most “Gen X’ers” want more than a paycheck from their employer. They.. . well, we, want personal and professional growth, too. One of the most valuable benefits an employer can offer in today’s market is the opportunity to acquire new skills, not money. Sure, Gen X’ers will take your money, too, and the more the better. But for many of us, that’s not we value most. We may not have been around the block as many times as you, but the blocks we’ve been on may have taught us a thing or two you don’t know. For example, most Gen X’ers grew up in the 1970s and bore witness to massive job layoffs. As impressionable children, we experienced the resignation of President Nixon, the oil embargo and the war in Vietnam. Later, as we prepared to enter the legal job market, we saw 100-year-old firms splitting up and collapsing under the weight of “tradition.” Technology cut our ties to the library and even the office, since most of us can comfortably communicate and exchange information from anywhere in the world. Many of us grew up as latchkey kids and don’t necessarily want or expect anyone to be waiting at home or anywhere else for us.. . and that includes the office. Firms seeking to attract and retain the best support staff and associates need to trade in the commodity of the day if they want to keep us around. Most Gen X’ers value flexibility and opportunities for personal or career growth. Like it or not, we might not share your confidence that the firm will still be around once we’ve paid our dues for senior staff or coveted partnership positions. Generation X In my work as a practice management advisor, I educate managing partners and law firm administrators regarding all facets of running a more profitable, ethical, and professional firm. One of these facets, of course, is staff retention. A big part of my job in this area involves helping Baby Boomer partners and administrators shift their paradigm from manager to coach. A manager tells people what to do and keeps after them until they do it. A coach finds out what motivates a person and uses those internal desires to achieve results. A manager designs a firm in a vacuum and then imposes that design on the staff. A coach investigates what skills, interests, and abilities he or she has to work with and designs a firm around those resources. More than ever before, when law firm administrators become law firm coaches, they are experiencing greater and greater results. Coaching is actually pretty intuitive once you get the hang of it. The first thing you do to coach your staff is recognize that they do their jobs for their own reasons, not your reasons. Then you set about finding out what reasons the person has for doing the job you hired them to do. Some people will want or need money so badly that their own personal reasons take a backseat to the paycheck and will do anything you ask of them. Most people on your staff, certainly most Gen X’ers, will not fall into this category. Once you know what reasons each person on your staff has for doing their job, you can start to find out what they’d like to be doing in, let’s say, five years. With that information, you can begin to design a job for that person so that doing it actually serves their needs and your needs, too. This might sound exceedingly difficult. It really isn’t, especially not when compared to the alternative. The Elusive Associate The short answer is that there is no such thing as a “perfect” associate, and anyone who tells you otherwise is, well, let’s just say they’re no wunderkind. Nor is there a perfect firm, manager, or coach. It’s the 21st Century and time to face facts: Running a law firm is not easy. It takes a lot of creative hard work and follow-up. The question you need to ask is whether you’d rather spend your time hiring, training, and firing staff and associates who don’t fit your model, or if you are prepared to start managing in the 21st century? RJon Robins is a lawyer and practice management advisor with the LOMAS program, which is available for on-site consultations and for speaking engagements at local bar meetings. Call (800) 342-8060. September 1, 2001 RJon Robins Regular News Start managing your firm or pay the consequenceslast_img

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