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Many law firm partner compensation plans were designed during a time of near unlimited demand for legal services, when clients might whine a little but would otherwise pay ever-increasing hourly rates. High demand served as “bowling alley bumpers,” protecting partners from the adverse effects of ineffective marketing and business development, ensuring that revenues and profits increased every year. And so countless partners came of age believing that simply delivering good legal work was a certain recipe for financial success. In today’s market, clients have a wider menu of options for procuring legal services, so finding and keeping client work is more challenging and more critical than ever. But law firm leaders are waking to the realization that partner compensation plans often underemphasize business development and, in some cases, pose a significant obstacle to fostering a collaborative, client-focused, continuous improvement and growth-oriented culture. It’s time to fix that.

Follow the Money

If we want to accelerate our business development performance to meet our growth goals, we first need to know how we make money. We must understand the building blocks of our business, working backward from aggregate results, to the practices and matter types generating those results, to the efforts necessary to win more of these activities. Instead, many practice group leaders start at the opposite end by allowing the partners to brainstorm different marketing activities they enjoy, irrespective of effectiveness, and build marketing budgets around these preferences. A more sophisticated approach incorporates past performance and helps to prioritize marketing and business development efforts. Done well, the practices invest primarily in marketing tactics that create visibility and generate opportunities with key clients or targets, primarily where there’s greater potential for competitive differentiation. And to improve the probability of converting these opportunities into paid engagements, leaders draw on the varied expertise of cross-functional teams. The best rainmakers may open a new discussion, but the most consultative partners will help the client scope the issue, and the top technical experts will help devise a project plan, and the finance team and management will craft a suitable budget. It takes a village.

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