Effective performance management for smaller law firms

Ian Hopkins 20-12-2023

Ian Hopkins explores best practice in delivering effective performance management in smaller law firms. This article first appeared in the December/January 23/24 edition of Legal Abacus Magazine.

Research will show that employees who feel they are valued by their employer and have the opportunity for personal development are more likely to be higher performers and be loyal and committed employees.

Successfully motivating the people in your firm is key to determining the success of your business and explains why an effective performance management process is so important for all law firms, irrespective of size.

So, what is performance management?  In simple terms, it is a process which contributes to the effective management of individuals and teams in law firms to deliver high levels of organisational performance.

Whilst performance management is relevant to all law firms, smaller firms lack the resources to manage performance available to larger firms. For example, smaller firms may lack access to specialised Human Resources advice.

What steps can smaller law firms take to enhance performance management and improve organisational performance in their firms?  Here are my top five tips that will help level the playing field for smaller law firms.

  1. Understand the importance of “buy in” and communication from senior management.

Unless the leaders in your law firm are committed to performance management, any system you introduce will likely fail.

 Quite simply, if senior management pays lip service to the performance management system, then so will everyone else in the firm, resulting in a waste of a lot of valuable time.

Successful performance management depends on the engagement and involvement of all employees, so good communication about all aspects of the scheme is key.  Make sure you communicate what the performance management process is looking to achieve, how it will operate in practice, how objectives will be set, what criteria will be used for evaluating performance, and whether it is linked to pay or bonuses.

  1. Deal with underperformance when it happens, not at the annual review meeting.

Research shows that 80% of all office workers would prefer to receive feedback at the time, rather than wait for their annual or quarterly review.

I have known situations where poor performance in law firms is stored up and discussed by the manager with the employee at the annual performance review meeting rather than being dealt with at the time it occurred. The annual meeting may take place many months after the poor performance has occurred, resulting in the feedback being retrospective, out of date, and often resented by the employee who wonders why the issue has not been raised previously.

Managers need to address performance problems at an early stage, so the employee receives feedback in real time and can start addressing the poor performance immediately.  Performance improvement requires the feedback to be accurate, relevant, and timely, so giving staff “surprises” related to poor performance at their annual review meeting should be avoided.

  1. Move away from the big annual review meeting and invest in performance management training.

Effective performance management involves regular reviews, not just a once-a-year meeting between the employee and manager.

Make the conversation between the manager and employee as informal and stress free as possible. Some employees find performance reviews stressful so consider shorter, more regular informal performance conversations, perhaps three times a year on a rolling four monthly basis that provides the opportunity for regular check-ins to monitor progress.

Consider Investing in training both for those leading the performance conversation and those being appraised so that your managers and staff become more confident with the process which delivers better results consequently. Management does not come naturally to everyone, and lawyers are trained to progress their client’s matters, not necessarily manage, and motivate their colleagues.

When done well, both the regular appraisal conversations and feedback can be hugely motivating for employees and beneficial to all parties. As an illustration, research has shown that the more often objectives are reviewed, the better the employee’s performance.

  1. Agree SMART objectives with your employees that align with your firm’s strategy.

Show your employees that their work contributes to the firm’s purpose.

Setting objectives that clearly align with the firm’s goals is vital for employees to feel connected and part of something that makes them feel proud. Demonstrate how their actions are an important part of “making the boat go faster” at your firm.

Ensure the objectives are specific, measurable, achievable, realistic, time related and importantly agreed by both parties as opposed to being imposed on the employee by the manager. The employee’s agreement to the objectives is a vital component of establishing the employees “buy in” and commitment to achieve the objectives.

  1. Capture outcomes and monitor the effectiveness of your performance management system.

Key actions arising from the discussion between the manager and the employee should be summarised in a short user-friendly form and shared with the employee. Avoid overly wordy and bureaucratic documentation in your performance review process. Keep the process as simple as possible.

It will be necessary to continue to monitor and review the operation of the performance management scheme. All law firms operate within fast-moving environments and changing circumstances may make it necessary to make adjustments thereby improving the process as part of a continuing improvement culture at your firm.

By following these five tips, smaller law firms are likely to experience a more effective performance management process with improved levels of employee engagement and organisational performance as a result.