Current state of play and challenges faced.
The legal profession in Australia currently faces many challenges when it comes to recruiting and retaining good employees. Externally, the demand for such talent is high. Internally, anachronistic and increasingly outdated reward structures (including the traditional ‘lockstep’ model) impede the ability to incentivise and reward performance and desired behaviors. The obsession with short-termism and acute focus on billable hours is symptomatic of this broad malaise.
How performance evaluation and performance management structures can better guide reward decisions
Law firms need to reassess how and what they measure when it comes to performance evaluation and management. There is increasing recognition of broader, non-financial objectives within a ‘balanced scorecard’ framework. For example, measures relating to professional development and leadership could be incorporated. Lead, ‘inputs-focussed’ indicators could be adopted for performance assessment of individuals or practice groups. Assessment of such components of the scorecard could be undertaken more regularly alongside traditional assessment of the firm’s financial performance.
What benefits could an ASX listing offer and what are some of the issues that may be faced?
An ASX listing offers the opportunity to introduce a formal and more robust performance management framework. Such a framework can better align underlying performance to employee reward. Having permanent equity in the firm can assist in recruiting and retention initiatives. It can also incentivise long term value creation, rewarding employees for building lasting businesses and not just current billings. An ASX listing introduces external shareholders, the duty to shareholders will need to be integrated with the lawyer’s duty to the client.
Mercer's Legal Industry Event - July 2016
Join Daniel Yin, Raphaele Nicaud and Simon Kennedy along with partners and senior management from Australia’s legal profession, in Sydney and Melbourne during late July, to discuss the above workforce challenges faced by the profession.
Tuesday 26 July, 2016
Mercer Sydney, 201 Sussex Street, Sydney CBD
Thursday 28 July, 2016
Mercer Melbourne, 727 Collins Street, Docklands VIC
There will be a Main Plenary Session and an opportunity to register for a more intimate Small Group Session also. To register for both, please use the link above.
About Daniel Yin
Daniel Yin is Practice Leader for the Executive Rewards consulting practice in the Pacific region.
Daniel holds a Bachelor of Laws and a Bachelor of Economics from the University of Sydney and an MBA from the Australian Graduate School of Management. Daniel holds an Australian Practicing Certificate and is authorised to engage in legal practice as a solicitor. His background includes professional services experience in tax and legal advisory (Arthur Andersen & Clayton Utz) and financial services experience in investment and private banking (Barclays Capital & Macquarie). Daniel has assisted large and mid-tier law firms (including ASX-listed firms) with developing and implementing a range of reward and performance management structures.