1.0 Reward System Design (450)

1.1 Current Issues: Add theory and Current issue at TMLF

1.2 Applying Expectancy Theory and ERG

1.3Improving: Explain improve with theory apply

Add reference: Journal Article

Case Report: TMLF is law firm that has been operating locally in Perth for nearly 54 years and has a local workforce of just over 200. Its current structure and way of operating was largely shaped by industry practice in the 1980s, one in which partners and senior solicitors oversee personal client portfolios they have built over many years.Solicitors earn promotion and bonuses through bringing new clients to the firm and by demonstrating their value to the firm in the billable hours (hours charged to clients) they accumulate. A good number of the current firm's partners took over 20 years to work their way from an articled clerk (the most junior position) to a partner (the most senior).Partners generally have two or three senior solicitors under them that help them manage the work of the many junior solicitors and articled clerks. The firm in part makes money by charging rates over and above the cost of these junior staff to the firm. While an articled clerk may be billed out to clients at over $100 per hour, these staff generally receive far less than that.

While an articled clerk will often work long hours, many junior staff complain that they have trouble reaching their quota of 37.5 billable hours per week as they do not get credit for all hours worked.There have been complaints that some senior staff take credit for the work of subordinates and then charge clients at their far more expensive rates. While there is no evidence of this, many senior staff do seem unconcerned about the tremendous pressure for results and the difficulties experienced by junior staff. There is a belief this tough initiation is part of the firm's "individual high achievement" ethos. One that is summed up well with these words from one partner, "I never got an easy ride on my way to the top; it was hard work and perseverance in bringing new clients to the firm that got me to where I am. Those that make it have the tough mindset that this firm needs to survive - it's just how it works and what we are left with in the end are the best."

Yet in recent years TMLF has struggled to grow its revenues from key mining clients. It was clear that many clients required legal specialists with industry knowledge as corporate legal services is an increasingly complex area. Lawyers were now engaged so frequently in the course of doing business that many companies set up their own legal functions in order to effectively manage commissioned legal practitioners. A recently appointed partner Geoff Baker observed, "As many of our clients have grown, we are finding they often have their own legal people that are quick to pick up on where we fail. Our clients are far more sophisticated these days and some of the 'old ways' are causing a crisis in client satisfaction. This is why we are not growing with our clients."

TMLF's better junior staff are often poached by their clients. As soon as junior staff accumulated enough firm specific experience, they are often lured to the client firms by the more secure and attractive roles in these large growing corporations. There they assist directly in the contracting, negotiation and risk assessment activities. Given this, it is hardly surprising TMLF's corporate law revenues have remained stagnant for some time despite the obvious market growth generated by the mining boom.

In an unusual step for TMLF, to respond Geoff Baker recruited Tamara Davies from one of his client firms to build and lead a new Mining Services team. Tamara's indigenous background and lengthy service as a corporate lawyer in the Mining sector made her an ideal choice. She had developed a reputation among indigenous leaders as someone that can be trusted. By working with the elders of many indigenous communities, she was often able to break through negotiation impasses between different communities and the company she was working for to enable mining projects to proceed. Her collaborative approach with clients and her team made her a skilled consensus builder and negotiator.

While Tamara has a small team and a starting appointment at senior solicitor (an unusually senior new appointment for TMLF), many senior staff at TMLF seem unprepared to put their clients through to her. She feels her team's critical knowledge and networks are frequently not used when they should be. While many senior TMLF colleagues had large mining clients, only her managing partner Geoff Baker was prepared to allow her to take a leading role in directing negotiations with his clients. Recently Tamara was even told by one partner, "Like the rest of us had to do here, you will need to win clients for yourself young lady. It was me that brought my clients to this firm, and I know what they want."

After 12 months of frustration, Tamara is now talking openly about leaving as it is clear her own targets for billable hours (and her team's) can't be met while this situation persists. Tamara believes many senior staff see her as a freeloader because she hasn't earned her senior appointment in their eyes. She said to you recently, "I'm no freeloader. There is an opportunity here for other senior staff to use the knowledge and networks of the team I have built. We can do things better by building trust between our client companies and the different indigenous communities. Many round here prefer to do most of it themselves as it helps them hit their billable hours targets but, that approach too often generates needless conflict between indigenous people and our client companies. That inevitably results in avoidable long-term costs and reputational damage for clients, and problems for indigenous people."

While senior partners have commissioned you to assess the problem from a management perspective, it is clear to you any change will be unpopular with many.