Running a law firm can result in having to balance various competing interests. One of the most interesting quandaries that a law firm can face is realizing that employees almost always want to get paid more, while clients are almost always looking to pay less.
This is one of the most interesting catch-22’s that are out there when running or operating a law firm. Over time, employees want to see their life going in an upward trajectory. They want things to get better and better for them over time. Otherwise, most employees will not be happy. If they are not happy, they may not stay long-term.
Better can involve seeing their base pay and incentives going up over time. Better involves seeing the benefits that the firm offers getting more lucrative over time. Better can also involve more paid time-off or other fringe benefits.
Even at the workplace, employees want better. Better can involve a new work computer or phone to make the job easier. It might involve better office equipment. It might involve a desire for better facilities. The reality is most employees want more.
At the same time, in almost any law firm, clients want the cost of representation to be less. No matter how much the case costs, most clients (even if happy with the result and the representation) would have preferred to pay less. Even if the client got the general results that they wanted, the reality is that deep down they would have hoped to pay less legal fees.
Running a law firm effectively almost always involves trying to walk the tightrope as carefully as possible. In other words, if the law firm gives the employees everything they want, the rates usually cannot be low — and clients then might worry about the cost of the representation. Over time, this can hurt client satisfaction and/or the ability of a law firm to get new business.
On the other hand, if the law firm charges significantly less than market value to keep client satisfaction high, the law firm will likely not do well financially. This might result in employees who are unhappy and/or who seek employment elsewhere because the law firm does not have the money to pay for the better salary, the better benefits and the better work environment they seek.
How you balance these competing interests is really critical to the success of most law firms. Law firm owners and managers will need to think long and hard about how they navigate this catch-22. In many ways, it can feel like you are trying to perform a magic act to make it all work.
For most law firms, they need to have a thorough budget put into play that carefully takes into consideration both of these competing interests. Obviously, law firms want clients to be content with the fees they are paying. At the same time, law firms needs happy employees to perform competent, communicative and diligent work for the clients.
If you have any thoughts, feel free to share them below.