Performance appraisals

Handled well, performance appraisals can be an effective tool which can lead to higher performance, increased productivity and a more culturally attuned employee.

Handled poorly, appraisals can be a negative and uncomfortable experience. Rather than allowing billing targets and CLE programs to dominate the conversation, appraisals represent a real opportunity to expand the solicitor’s commercial and cultural awareness and to identify opportunities for how they may better contribute to both firm culture and the firm’s strategic plan.

It is incumbent on the principals and senior staff to recognise that their leadership is also a factor in the equation and the ideal environment is one which encourages and inspires rather than simply providing a black or white conversation.

Rather than being an overtly formal occasion which may cause discomfort, the appraisal should take the form of a regular informal conversation every three to six months.

The appraisal should focus on four principal areas:

1. Quality of work

There is no avoiding the fact that the rate of recovery of WIP and ultimately the profitability of the firm is largely determined by the quality of the work performed by the firm. The principals need to have quality staff upon whom they can rely for the majority of the work performed in the firm. However, technical competence in its own right is not enough. Staff contribution to productivity, office culture and client relationships are also critically important. But quality is also a function of mindful supervision.


2. Productivity and profitability

The solicitor’s contribution to the profitability of the firm is critical to the success of the firm. However, principals need to understand both the outcome and how this is achieved.

You do not want solicitors (or anyone else for that matter) maximising their chargeable time by gaming the system by, for example, charging large numbers of single six-minute units or charging time for activities that do not advance the client matter.

Regardless of the billing methodology it is important to continue to time record as it is the only way to truly measure productivity. And if you cannot measure productivity you cannot measure profitability, which is critical in managing the performance of multidisciplinary practices.

The most common financial performance metrics required are:

  • between 5.0 and 6.0 chargeable hours per day (although recent FMRC surveys have found that, across the board, principals and solicitors both are struggling to recover more than 4.0 hours per day.)
  • employed solicitors to recover a minimum of three times their salary package.

3. Strong client focus

In an increasingly competitive legal market client service and support are critical to client retention. Responsiveness to client queries and prioritising client deadlines are essential characteristics of a strong client focus.

Clients may be prepared to reconcile themselves to paying higher fees if they are satisfied that they are getting a commensurate level of service. For this reason it is important that every client is asked after the conclusion of each matter to identify how the firm could have improved its service. If possible, this conversation should be with a principal not responsible for the conduct of the matter.


4. Positive attitude and contribution to culture

The Corporate Leadership Council, a global research platform for HR professionals, discovered that “emotional commitment is four times more influential (author’s emphasis) than rational commitment”.1

If the firm’s principals are able to develop a positive firm culture then it is far more likely that their employed staff will make a greater effort to contribute to the firm’s success. Their contribution to the culture, their respectful collaboration with other staff, their enthusiasm to participate in firm activities and their preparedness generally to assist the firm are all important and observable indicators of their commitment to the firm.

Culturally energised staff will be keen to learn how the firm is performing and how they can best contribute to the firm’s success. Revealing the firm’s budget and progressive performance through the year can do much to boost an employee’s understanding of their personal contribution to the business and lead to greater enthusiasm and commitment.

Important strategies to adopt to maximise the value of performance appraisals:

  • Appraisals should be a regular part of the firm culture.
  • Don’t wait for a formal appraisal if somebody’s conduct warrants intervention.
  • The employee should complete the appraisal form first to minimise the chance of surprises at the appraisal.
  • Encourage the employee to do most of the talking to take responsibility for their own performance and growth.
  • Look for opportunities to commend positive performance as well as identify areas for improvement.
  • If you set specific objectives during the appraisal session ensure that you follow up within a reasonable period of time.
  • Consider disclosing the firm’s budget and progressive performance against budget to enable the staff member to better appreciate their role and purpose.

1Michael Henderson, Dougal Thompson, Shar Henderson, Leading through Values, Harper Collins 2006, p51.

Graeme McFadyen is the CEO of Kemp Law.


This story was originally published in Proctor May 2020.

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