Competency-based Performance Management
A Remedy for Eroding Firm Culture
University of St. Thomas Law Journal Symposium
October 28, 2013
Agenda
• Setting the scene
• Primer on competencies
• External cultural influences
• Internal cultural influences
• Competency-based management as a tool for
change
• Affecting change
Setting the Scene
• In the last 25 years, lawyers grew in number and
wealth
• Law firms – largest employer of lawyers – expanded
and contracted multiple times
• Competency-based performance management
was introduced mid-1990’s and caught on
• Boom periods drive firm cultures toward
individualism, but bust periods require collectivism
• Competency models can assist in bringing about
needed the cultural change needed
3
The 30-Second Definition
Begins with McClelland and “the professional”
• Why do people with equal IQ perform differently?
• Behaviors, Traits, and Values differentiate
successful performers
• and can be isolated, defined, and taught
Advantages of a competency development
model:
• Clarity of expectations, experience-appropriate
milestones, aligned reward systems
5
The Boom
7
1986 – 2012:*
AmLaw 100 firms
increased from $7
billion $71 billion
PPP increased from
$324,500 to $1.4 mil
NY Associate
salaries from $53K
to $160K
* The American Lawyer
The Way it Was
• Manageable number of equity partners
• Few offices, mostly domestic
• Compensation lockstep
• Firm clients
• Partner for life
• Up or out associate leverage model (pyramid)
And the culture?
10
The Way it is
• Large lawyer populations in firms
• Far flung offices
• Origination rules
• Partners have portable “books of business”
• Partner promotion flat, wide swaths of non-partner
senior lawyers
And the culture?
12
What is Culture?
Two layers
• Visible patterns of behavior – what you do and
what is acceptable
• Shared belief system and values passed from one
generation to another – what you show others is
important
15
Time to Balance Collectivism and Individualism
Flat market, increasing
competition creates a . . .
• Need to collaborate, but also
support break out performance
• Need to solidify client
relationships by letting others in
• Need to take personal
accountability, but also share
resources and opportunities
16
Using Competencies to Affect Cultural Change
Moving beyond associates and staff:
• Time to extend the development model to partners
• Create a natural developmental trajectory
• Describe the desired behaviors, traits, and values
for all firm members
• Balance a focus on breakout performance and
collaboration
• Create a shared language of success
17
18
Competencies – Performance Factors - Levels
Core Competency - Drive Performance Factor - Entrepreneurship
Associate Level Counsel Level Partner Level
Understands the strategic plan for the practice and firm; has a positive reputation with internal/external clients; contributes to business development activities; is actively building a professional profile in/outside of the firm; is establishing and maintaining a professional network.
Supports more senior lawyers’ strategic plans and efforts; exhibits drive to be indispensable to others; supports business development activities willingly; looks for opportunities to expand visibility through writing, speaking, and organizational membership.
Develops and executes an annual strategic plan for growing revenues and profits in alignment with firm strategy; demonstrates consistent ability to obtain additional work from existing internal/external clients; looks for opportunities for new work within existing projects; engages in strategic business development planning.
Core Competency - Leadership Performance Factor - Collegiality
Associate Level Counsel Level Partner Level
Commits time to building and maintaining relationships with colleagues; pitches in to help colleagues as needed; volunteers to participate in firm activities; looks for ways to build the firm’s reputation through professional activities outside the firm; actively seeks mentoring from more experienced lawyers in the firm.
Uses strong internal and external professional networks to connect colleagues with one another; demonstrates a willingness to advance the business goals of colleagues; seeks opportunities to promote the firm in the community; mentors and trains more junior lawyers.
Devotes significant time to nurturing collegial relationships; exhibits a record of sharing business opportunities with a diverse group of colleagues; models a firm and community service ethos; is building a talent pipeline for succession.
How it Works
• Consistent, positive reinforcement
• Aligned rewards
• Rewards for breakout performers, but not to the
detriment of the collective
• Not swayed by demands for special treatment
• Clarity of expectations allow for free choice
• Know what it takes to succeed
• Meaning derives from achieving mastery
19
Why it Works
Affect both layers
of culture:
• Enforce adherence
to visible behaviors
in framework
• Grow the behaviors,
traits, values in
lawyers over time as
they develop
20
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