ABA Journal

The New Normal

Rethinking rewards: What BigLaw can do about pay

By Roya Behnia

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Roya Behnia

Roya Behnia.

I just completed a renovation that took over four months—the apartment hadn’t been touched in 40 years. Because I visited the job site almost every week, I got to know the construction crew well and gained respect for their work ethic and attention to detail. Afterwards, in appreciation, I gave each a cash bonus. When I look at my home now, it occurs to me that this construction team had no idea I would reward them for the near-perfect work. They took time and care to deliver an exceptional product without expecting an extra incentive.

We can see similar examples of professional dedication almost everywhere, from the local coffee-shop server who knows your name and order to the retail clerk who tells you to defer buying that shirt for a week so you can take advantage of a sale. Some companies, like Nordstrom and Southwest Airlines have stellar reputations for empowering their people to deliver exemplary customer service. What is common in these employees is a sense of purpose, mastery, and autonomy, not an expectation of a financial reward. Organizations who engage the “intrinsic motivation” of their employees tend to be more successful than those who do not.

So why does BigLaw persist in thinking that high pay is the default answer to attract, retain and motivate talent? I have written here and here about the fallacy of tying performance just to money and its corrosive effect on firm culture and strategy. But firms continue to resist a different approach to rewards because of institutional but untested assumptions that high bonuses and salary drive behavior. These assumptions are wrong. We can and should draw lessons from how others are thinking about employee engagement.

Compensation experts in the corporate world have long talked about “total rewards” rather than just salary and bonus to engage the best employees. Total rewards include “soft” elements such as benefits, work-life balance, career development, leadership opportunities, autonomy, flexibility in how to achieve results, and recognition. Study after study show that BigLaw firms should be thinking not only about how to incorporate a “total rewards” philosophy in their compensation programs but also how these rewards may be valued differently by lawyers at varying stages in their careers. An interesting study (PDF) of over 600 accounting students sponsored by World at Work tested the proposition that

“The nature of the relationship between individuals and organizations varies across … three behavioral outcomes (attraction, motivation and retention) due to different career stages and factors related to one’s personal and professional values and interests.”

The results revealed that “development and career opportunities” were important in attracting new hires to all the Big Four accounting firms. After hiring, “work-life” and “performance and development” rewards (meaning performance management/feedback, goal setting, an understanding of how individual contributions relate to firm success, and opportunities for career development) were most important to motivation and retention. Interestingly, “compensation,” while important, became less important during the job search process. The authors concluded that “these findings suggest that factors important to attracting an applicant may not be the same as those fostering motivation or even necessarily preventing turnover.”

A 2009 McKinsey survey of over 1,000 executives, managers and employees replicates these findings:

The respondents view three noncash motivators—praise from immediate managers, leadership attention (for example, one-on-one conversations), and a chance to lead projects or task forces—as no less or even more effective motivators than the three highest-rated financial incentives: cash bonuses, increased base pay, and stock or stock options … The survey’s top three nonfinancial motivators play critical roles in making employees feel that their companies value them, take their well-being seriously, and strive to create opportunities for career growth. These themes recur constantly in most studies on ways to motivate and engage employees.

How can BigLaw leverage these findings on retention, motivation and engagement? Attracting new hires would take a different shape than the current approach of emphasizing firm prestige and high pay, and more senior associates could take a greater role in the strategic direction of their firms.

What if firms designed development programs that followed the contours of an individual’s career? What if they invested not just money but senior partner time? What if these development programs built on each other throughout the first several years, and junior associates saw partners walk the talk on the importance of these opportunities to the culture of the firm? As associates progress in their careers and their needs and values change, what if the firm invited them to vision and strategic planning sessions at which their views are welcome and sought? What if performance management sessions are taken seriously, involve 360-degree surveys, and require regular follow-up? What if individual goals tied to firm strategy are decided upon in advance by the associates in conjunction with their practice leaders?

The decision to engage in “intrinsic motivation” is hard, especially in environments such as BigLaw where time is money and the pressure to bill can override time spent developing lawyers. But the evidence is overwhelming that when firms focus on what engages their employees and reward them according to their needs for purpose, mastery and autonomy, they can attract and keep the best talent.

Roya Behnia most recently served as senior vice president, general counsel and corporate secretary of Pall Corporation, based in New York, until September 2015 when it was acquired by Danaher Corporation. Prior to Pall, she was general counsel of a publicly held Internet marketing company in Chicago. She started her legal career at Kirkland & Ellis in Chicago, where she was a litigation partner.

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