Brenda Barnes | How Law Firm Compensation Shapes Retention and Succession

Elise Holtzman: Hi, everyone. It's Elise Holtzman here, a former practicing lawyer and the host of The Lawyer’s Edge Podcast. Welcome back for another episode.

Recruiting, retention, succession, jockeying for and disputes about compensation, most firms are dealing with all of it at once. And it sometimes comes back to a similar root issue, how lawyers get paid. Today's guest has spent more than three decades inside law firm finances and she's seen the real story behind some ongoing challenges. Why younger lawyers get labeled disloyal, what's actually changing in small and mid-sized firm pay structures and how compensation quietly shapes what succession planning looks like and whether it gets addressed at all. We're going to get into all of that today.

Before we dive in, today's episode is brought to you by the coaching team at the Lawyer's Edge, a training and coaching firm, which has been focused exclusively on lawyers and law firms since 2008. Each member of the Lawyer's Edge coaching team is a trained, certified and experienced professional coach and either a former practicing attorney, or a former law firm marketing and business development professional. Whatever your professional objectives, our coaches can help you achieve your goals more quickly, more easily and with significantly less stress. To get connected with your coach, just email the team at hello@thelawyersedge.com.

I am delighted to welcome today's guest, Brenda Barnes. Brenda is the founder of Brenda A. Barnes Consulting, where she works directly with law firm leaders on compensation design, succession planning and financial strategy. She's a CPA with an MBA and has spent more than 35 years working with solo to midsize law firms on the financial side of the business, including many years as a law firm administrator in Austin, Texas. Before launching her consultancy, Brenda founded B2 Legal Management, an outsourced accounting and billing firm for solo to midsize law firms across the US, which she built and later sold in 2021. She is also a co-author of Respect, an insight to attorney compensation plans now in its second edition and a past president of the Austin chapter of the Association of Legal Administrators. Brenda, welcome to The Lawyer's Edge.

Brenda Barnes: Thank you, Elise. Thanks for having me.

Elise Holtzman: I'm delighted to have you. I know that you and I have hung out in some of the same places, including at the Managing Partner Forum, which works with solo to midsize law firms, across the US and Canada. And I wanted to bring you on this show, because law firms across the country, regardless of size, seem to be struggling with some similar issues these days. Recruiting, retention, succession planning and I guess the ever-present compensation disputes. But it seems that compensation has been coming to the fore in a lot of conversations that I've been hearing, when I go to conferences. And I think the same thing's going on with you. You're a busy person. Why has compensation, do you think, become such a critical issue for firms right now?

Brenda Barnes: Yeah, well, I mean, because compensation touches almost every challenge a law firm faces today, right? It impacts recruiting, it impacts retention, it affects culture, succession planning, leadership development and ultimately the value of the firm. You know, for many years, you know, firms relied on compensation systems that just evolved internally over time. But the systems that are being created today, have to change, because we have a different generation and different multi-generations that are coming into the law firm. I think the big ask, of course, is transparency, flexibility. How do I advance in a firm? And you would think that this would be easy to define for a law firm leadership and infrastructure, right? But oftentimes, we take for granted that they just know and that the associates and the junior partners know how they're going to move up the ladder and so forth. But, you know, I think at the end of the day, compensation is no longer just about dividing up profits. Become a strategic tool that determines whether firms can successfully transition leadership, retain talent and, you know, remain competitive.

Elise Holtzman: I find it remarkable that it's taken this long for people to really get serious about talking about compensation and being transparent. I mean, I started practicing a very long time ago, in the early 90s and back then we wanted transparency. Well, what does it take to make partner at this firm? You know, how do I make more money here for the hard work that I'm putting in? Is somebody else being compensated differently than I am at the same level?

Brenda Barnes: Right.

Elise Holtzman: And yet it's taken all of these years for law firms to finally start figuring out that these are important conversations to be having, not just in a compensation committee behind a closed door somewhere, but across the firm. And not, you know, I think when people hear the word transparency and you might've heard this as well, some of the senior partners start getting aggravated, because it's like, well, what do you mean transparency? We're not going to open our books to you. I don't think that's what people are asking for, Brenda. What do you think they're really looking for?

Brenda Barnes: It's exactly what you said. It's like working with clients right now and trying to relay to them that it's not how it was back in the day. And that's what I hear so much, you know and it's like the designated pie slicer sitting in the corner office. Yeah, it is a black box. It's not transparent. And, you know, a lot of and we'll probably get into a little bit more of this in detail, in a bit. But, you know, a lot of what the next generation is just looking for is how do I advance if I want to advance? And, you know, and for so long it was up and out. It was like you either move up the ranks and then become a partner, or you need to go find another place. Well, that's not the workers that we have today. I mean, they are looking for… Some of them are looking for equity. Most of them are not looking for equity. So it's really… It's quite interesting to watch as this develops and really reminding the generations that are now, because we're really in the second generation of retirement now, in law firms. And but they are faced with greater obstacles, because of the recruitment and retention issues that they're having and they're having to stop and pause and say, what can I do with my compensation system that will allow me to grow up these individuals in my firm, without risking them leaving, because I haven't been clear and concise about how they're going to advance in my firm.

Elise Holtzman: You mentioned this idea that the younger generation is looking for something different and we know that that's a topic of conversation in many law firms these days and in other places as well, obviously. I hear partners say all the time that younger lawyers aren't loyal anymore. Oh, these younger lawyers, they just want to come and do their billable hours and go home and they don't care about us and they don't care about the firm and they're not loyal. You're working with small and mid-sized law firms every day. From what you see, is that really what's happening? Are they disloyal? They just don't care about other people? They're just running around trying to get what they can get and that's it? What's really going on here?

Brenda Barnes: No, it's not a loyalty issue at all. It's a clarity issue. Younger lawyers came into a much more transparent world, right? They can compare salaries online. They can talk to their peers and other firms instantly. They want to know how compensation systems are made, the decisions are made. It's not about loyalty, but I will say after interviewing hundreds of associates in law firms about what their motivating factors are, it really is a lot different than the first and second generation law firms had put in place. It is more about how can I get mentoring? How can I get, you know, what is what is in this for me? And, you know, again, is there a jumping off point, if I don't want to become an owner of the firm? So I think most firms end up losing good lawyers, not because of money, but because they don't see a future inside the organization. And so I think clarity, again, has become the new retention strategy, being more clear about how you get where you're going.

Elise Holtzman: That was what I was going to ask you, actually, because we're talking about this idea that compensation is a big part of this discussion. And at the same time, what I hear you saying is it's not all about money. And we know that that's not the only thing that's driving people.

Brenda Barnes: Yeah, I mean, you know when you talk to and again, you know, you start asking them what are some of the motivating factors. It is more of, well, the retirement deal, I think about the fact that they are burdened and saddled with law school debt, larger than any other generation. They are facing the obstacles of how to buy a home for the first time and build their families and that sort of thing. So their dissatisfaction with the world is different, right? And so they're coming into their law firm saying, you know, what can you do to help me navigate my career, but also have this balance of life, right? Because again, it's really important, you know, that on Saturdays they can go play at Martin Creek that they're not having, you know, they're not, tied to coming into the law firm and you will hear that over and over. And then there's this huge divide between the bosses and the associates on what that means, you know, they'll say things like why do I have to take my laptop with me on vacation? You know, it's like, isn't this my vacation, you know and that sort of thing. It's just a different mindset on what it means and I don't think I know that unless firms start changing to listen, I'm not saying bend over and make sure that the associates are accommodated, but I do think there's going to have to be some meeting of the mind, teaching the associates what it's like to be in the business of law, why we have to do certain things and client generations being passed down to them. And what a big benefit that is, when somebody hands you a book of business and a lot more of educating them on their part. But at the same time, the partners understand that, you know, not necessarily that they are going to have the same work ethic. And I use that kind of lightly, because I do think they work hard. I think they just want to work hard, while they're in the office and not be, you know, showing up for a show.

Elise Holtzman: And also I think it's important for senior lawyers to understand and look I'm learning about this too and I'm sure you are also, senior lawyers to understand that we were promised retirement. It's like work really really hard your whole life and then at 65 or whatever it is, you're going to kind of get the gold watch and you're going to be able to go and do what you want to do. That's not what the world looks like anymore. And they are not, the younger generation may not be able to retire. The younger generation, as you say, may not be able to afford the first house as early as we were. And so they do look at the world differently. And the listening part is what I think is really important. We can and many of us do say, well, these younger people and I can't believe they don't see the world the way we see it. I had a similar conversation last night with one of my adult children, where I was just sort of baffled by what her view on something in the world was. It wasn't actually about work. And I had to sit back and let her explain to me where that's coming from and what her generation has experienced and what they're afraid of and what they're concerned about. And so I do think that the listening part is very, very important.

Brenda Barnes: I agree with you wholeheartedly.

Elise Holtzman: We're going to get into compensation trends that you're seeing in a moment. I'm curious about the title of your book. You didn't just call it an Insight to Attorney Compensation Plans. You called it Respect and then subtitled it an Insight to Attorney Compensation Plans. Why did you choose the word Respect for the primary title?

Brenda Barnes: Because I firmly believe that the way attorney compensation is divided, is all about respect. And it's what do you mean, how much are you valued, not only by your law firm, but what your colleagues see, what your law school buddies see, your neighbors see. It's a huge mechanism of how, in my opinion, a lawyer is made up. And so respect is, to me, is the leading word on putting a compensation system together, make it fair, equitable and valuable and then make sure that everyone that leaves the table, thinks it's fair and equitable and that they are respected.

Elise Holtzman: It's a good point, right? One of the things that we do, when we look at our compensation, is we make a decision about how we're valued, right? And how we're valued in comparison to our peers.

Brenda Barnes: That's right.

Elise Holtzman: Whether or not we should be doing that is something that we absolutely are doing. And you see sometimes in law firms, if there's a $25,000 or $50,000 difference between what I'm making and the person, you know, a little bit ahead of me on the chart is making and I start asking questions about, well, why did that person get a little bit more money than I do, right? What does it mean? Am I being valued for the work I do, or why am I not? Do I feel that I'm not being valued for what I'm delivering to this firm?

Brenda Barnes: Yeah, well, and I think partner compensation design is a lot different than associate compensation design, right? So partner compensation's got to take into consideration those motivating factors of how you want to strategically build your firm. Associate compensation, on the other hand, needs to be built around, I call them core competency grids. So that they check the boxes, they know exactly, they know the range of compensation they're going to make at that level and they can see what it will take to advance, right? So I think it's a lot more defined, or should be at the associate level. Where partner I think sometimes has got to have some of that subjective criteria in it because you know, those that are just sitting on the boards of directors and are out, you know, doing what's best for the overall firm and not just, you know, pumping the billable hours out, have got to be rewarded in some great way, because that's how strategically you're going to be building this firm.

Elise Holtzman: So given the need to make sure the sorts of things that you've just mentioned are happening, right? Partners are being compensated for the value they deliver to the firm, for the growth of the firm. Associates need to be compensated on the basis of the skills and behaviors that they bring to the table in some sort of more objective way. What are some of the compensation trends you're seeing right now in small and mid-sized law firms, particularly among the ones who are being intentional about it and being strategic about it? What are they doing?

Brenda Barnes: So they're becoming more structured and written, right? So the criteria is written down. It's not just the black box. Also, I'm seeing a lot more focus on teams, profitability of the teams, because that plays into your succession planning, right? If you are building a team around that particular client and then rewarding those attorneys, based upon, not only client service, but on profitability, that's a big win, when you get ready to start transitioning. The other thing, you know, is point systems, credit based systems, where perhaps you've got some partners that don't want to relinquish equity. So you're starting to see more of these phantom equity plans come into place, where you can allocate profit units to your high performers, but not relinquish ownership equity. And this really helps make them sticky to the firm, if you will. And so, you know, I'm seeing a lot more partners asking about that. So how, you know, if we're not ready to share, you know, equity, what are some things that I can do to keep my high performers in place? And then, you know, again, for associates, it's the specific core competency grids, learning how to move and advance within the firm. I have to remind clients again and that's what I said at the very beginning of this, there's got to be flexible career paths, right? Because there's got to be some jumping off points, if you don't want to move all the way up from, you know, to senior associate to non-equity partner to equity. There's got to be… and the firm needs to be okay with it. You may have an extremely talented individual that has no interest in owning a law firm and you have to be good with that and find a place for them, because obviously they're adding value to your firm.

Elise Holtzman: And there's a mindset shift that has to happen there, right? Because traditionally there was something wrong somehow with somebody who didn't want to make partners. Like, what do you mean you don't want to make partner? What do you mean you don't want to own the law firm? Well, you know, those used to be the only options. And now to your point, people are seeking different options. And if you're not going to provide that to somebody, because you're sticking to the old ways of doing things, then you are going to lose somebody who is very good for the firm.

Brenda Barnes: Yeah, and you know, I also struggle with that, right, because I mean I grew up with the traditional minded partners. So it was like I was you know in the accounting department at an 85 attorney firm in Austin and I was expected to be there on Saturdays to be seen. And I was like, I mean that's just the mindset that it used to be right? So I struggle also with how can you think that way or how you know what… but you have to really be deliberate and on knowing that that was the mindset then, you can hold people accountable for contributing to the overall efficiencies and profitability of your firm, but it doesn't necessarily have to be on the same path that you took. It's reminding them over and over and again, like I said, I struggle with it sometimes too. I mean even with our 20-something year old kids. I'll be like what? Yeah, where are you going? Because they just… they think of things a little differently.

Elise Holtzman: It reminds me of the old expression, do you want to be right, or do you want to be happy?

Brenda Barnes: Right.

Elise Holtzman: Right. I think it's, we have to, you know, as senior leaders, or up and coming leaders, we have to look at the situation and say, you know, I can fight this all I want, or I can meet the moment. And when firms reach out to you to talk about their compensation plans and to see if they can come up with something that's going to drive retention and succession and all the things we've been talking about, do you find that they're coming to you with ideas, or do you find that they're really kind of stuck on the old way of doing things and they can't figure out what's next?

Brenda Barnes: Well, I think some come with some ideas. You know, usually when I get called in, there is a little bit of friction. So if it's at the partner table, there's always, either we've got a partner that won't retire, that's holding on to all the origination and therefore, you know and the compensation, help us try to get that managed. Or, you know, we have a huge business developer, rainmakers, you know, in the firm that are not getting rewarded sufficiently and we're concerned that they are about to walk over to some other firm and join them for higher comp, so please help us. You know, but I think most of the time, they are relying on us to come up with ideas. So I typically recommend to the clients, let me spend 30 minutes, 45 minutes with each one of your partners. Let's talk about strategic objectives. Let's talk about what you think is important, because I will tell you, those conversations will flush out your issues and you'll know right away what type of modeling you need, to probably put in place to help them. So you really try to lead them to the answers and you also educate them, as you're moving through the modeling of their compensation plan, as to why this is going to work. And then I always do say, Elise, you know, it's like this is not set in stone and we're going to shut the book and forget it. This is a system that we need to look at every year. And if, you know, this year we've increased origination credit to 25 percent of comp and we've gotten what we need and all the conference rooms are full and everybody's pipeline's good, then, you know, change it and then revise it to motivate what other type of objective you're trying to achieve. So, I think, you know, the conversations and you know this, lawyers don't like conflict, right, even though, right, with each other and with their staff and that sort of thing. So, bringing in someone to assist them, really helps them with the conversations. So anyway, I really try to start educating immediately with the owners as to why. I just finished a huge project in Austin on associate plans. And it was, it's been almost a year and we're finally, finally there and I'm so happy. And I think they are as well. But it took a lot of coaching, because I had, you know, half of the shareholders who could not get off the billable hour requirement and what the associates needed to do, because they just kept thinking, you know, the way they’re traditional… I always call them traditional minded lawyers. But so, yeah, I think it's all about spending time, education. They will come with some ideas, especially the mid-year, the junior partners. They have ideas and they have good ideas.

Elise Holtzman: You mentioned that you've interviewed hundreds of associates. How frequently are you interviewing associates of a particular client, to find out what's going on at their level? Or is it that you've done some of this stuff on the outside and you're bringing that data to the partners?

Brenda Barnes: No it's on the… I've been hired to come in and help with the associate compensation plan and my first suggestion again is always can I… may I speak with them, because I think you got to understand what's motivating them. You got to see if there is a consensus of a theme that's going on. You need to know whether it's a cultural issue, because clearly, if they've got, you know, some some irate partners throwing their phone and you know, that sort of thing is the culture such that no matter what you do with the compensation system, it's not going to help, you know, so really converse. So, yes, no, I haven't gone out and done, you know, interviewed outside of clients. It's all been inside our client structure.

Elise Holtzman: I want to dive into some of the details of some of the associate compensation systems that you have helped law firms come up with. You talk about level-based associate compensation systems. What does that mean? What does that approach look like?

Brenda Barnes: Yeah, so it's basically taking your group of associates and coming up with core competencies, right, legal skills, client communication, project management, things like that and then placing your associates in level one, level two, level three, maybe level four, but typically level four has gone on into non-equity partner. And this gets away from that lockstep, right? Because everybody has a tendency to go, well, when did you graduate from law school? Therefore, you're going to be clumped with this group. And even if you don't have level-based compensation, you still clump everyone together based upon that, usually, right? So what ends up doing is your rising stars get tamped down, because they don't see an opportunity to progress, right? So if you have a level-based compensation system, you're going to place them based on their core competencies to find that. I even go as far as defining it by practice group as well, because, you know, one, you know, a school law is different than a litigate. You know, I mean, there's just, you know, there's going to be different core competencies. And you define however many levels that the firm wants to have with the core competencies, you place the associates in, you look at market as far as salary and you look at salary bands at that point, right? So a range for a level one might be 135 to 165, or somewhere in there as far as, you know, the level one comp. And then you share that with them, right? You share what that band is. That way they can see what opportunity, what type of money they can make for the investment of their time. And that's the kicker. They want to know what they can make for investing their time. Otherwise, they don't see a benefit. They're not going to do it. Right. So core competency grids allow them to check the boxes. And it's really a lot better for firm management as well, because it gives you, you're able to take those core competency grids and turn them into evaluation forms and then meet with the associates and say, here's where, you know, all the boxes you checked this year and here's what we need to do to get you to that next level. And when you do that, you know, et cetera. So it really gives you a more structured environment to administer associate competence. You see it in other industries already, where these core competencies and level based moving from, you know, a one, two, three, four, is already working. They know it works. And so they're asking for it now in this, in the law firm structure.

Elise Holtzman: I like the idea that this sort of compensation system rewards the high performers, when they have developed these competencies, when they are delivering value in that regard, they can be earning at the higher end of that band. And for the folks who are wondering why they're earning at the lower level of that band, they can see what those core competencies are and make a determination about whether they're willing to invest the time and energy to develop those.

Brenda Barnes: Yes. I mean, to me, it makes logical sense, right, to do it this way. I will tell you the resistance that I get from partners and shareholders is they don't want to be handcuffed to what they feel is an inflexible system. And I bring them back to, this is your core competencies. These are the things that set their base salary. If you want to have some more subjective input into, then let's put that in the bonuses, the bonus scorecards that they are, whatever we're going to title it and kind of bring it home there, rather than trying to embed it in this base compensation system.

Elise Holtzman: That's interesting. And, you know, I think one of the things that comes to mind for me, while you're talking is this idea of high performers feeling that they're not being rewarded for their high performance. And so doing what you're talking about and then moving some of that subjectivity into a bonus system, seems like it would be a good direction to go in. And look, I think you'll agree with this, Brenda, because you know a lot more about this than most people. If a law firm had figured out the best compensation system for all law firms, right, everybody would be doing the same thing. And so, you know, what I'm hearing you say is there's a way to do it, in a way that makes sense for your firm.

Brenda Barnes: That's right.

Elise Holtzman: Right. And maintain some transparency and rewards people for doing the right thing and motivates people, who have some room for opportunity and that it's not set in stone. They can change it at some point, when they've made a decision that there are other behaviors that they want to motivate.

Brenda Barnes: That’s right. I mean it's just not a one-size-fits-all anymore and you have to customize and you can start with the base parameters, whether it's, you know, at the partner level, the finder, minder, grinder system and then you start and you build on to that, which is what I like to do. Because, I mean at the end of the day it is about productivity and client generation. So, you know, but there are more components, there's profitability, there's teamwork, there's delegation, there's are you planning for your success. There's so much that you could build into the bonus system, or the add-on system to really reward. And you don't have to make it complicated. I mean, you really can tamp it down to where, again, you feel that it's… you’re valuable, you trust the numbers, you know that you've got a good practice management system that is generating good stuff and you understand it. Even if you had a bad year, you still think your system is fair.

Elise Holtzman: I'm going to ask you a question that I hear from a lot of law firm owners, which is, doesn't it just come down to billable hours? We just need them to bill the hours and the younger folks don't seem to want to bill the hours.

Brenda Barnes: Yeah, that does come up a lot. So, and there is some truth that, you know, and this is where I go back to the education of the associate group about what it's, you know, what does it take to run a business and the profitability of it. But there are a lot of… there are questions that come up like this. Okay, my billable hour requirement 1700, a standard work year… and this is them 2080 years, I get three weeks of vacation PTO a year and then they want me to do x amount of non-billable time. Why do I have to do this non-billable time if you're going to ask me to do all this other stuff, right? And that is how it clicks and that and you're and I'm stuck. Well, you're building your own brand. You're building your reputation, you're doing your marketing. I said, those are the reasons that you want to do that. But it's a constant education of that, because the billable hour, I don't think it's a billable hour. I think AI is actually going to start changing a little bit of that. But I do think it's about the collected dollar. So it's all about hours that convert to collections, whether that be through flat fees or however you get there.

Elise Holtzman: We had a ride in the car with our family, a couple of days ago. And our middle child just graduated from law school, took the bar recently. And we started having this whole conversation about law firm economics. And I've got to believe she's not in the majority of people whose parents, because they're both lawyers and because I do what I do, talking about law firm economics. Nobody ever talked to us about it when we were young. And to your point, I think it's really, really important for them to understand how law firms function, so that you do get some of that fire in the belly. They do get excited about potentially growing a business. And the ones who don't get excited about it and to your point, want to, you know, bill their hours, do their work and go home, because that's the lifestyle they're looking for, understand how that's going to affect their compensation.

Brenda Barnes: Correct. Right.

Elise Holtzman: So everybody understands what's going on and can make their choices. We mentioned a couple times succession planning, right? This idea that the law firm has to continue, or you want the law firm to continue, after the current owners of the firm, are no longer practicing law. Talk to me a little bit about compensation and how it affects succession planning. What are you seeing?

Brenda Barnes: Back to your point about the other, I had a client that devised her compensation plan around her group and it was called Choose Your Own Adventure. And it was like, if you want to do this, then this is what I can pay for that, right? And it was a very happy firm. I mean, there's no turnover, because they choose their own adventure and she's good with it. But as far as succession planning and how compensation ties into that, a lot of it's going to be about the transition of client origination, right? It's going to be, how do we ensure that that client doesn't leave when that partner retires? And we also have to ensure that my compensation system doesn't have an origination policy that's in perpetuity, rather than for a stated period of time. And at some point, when do we share that origination with the relationship manager, right? And so it's all about taking a look at all of those components and figuring out how to do it. As far as generations that are coming into the law firm now and what… It's a huge question mark. It's, you know, how do I build a success? And I think that's one reason why you see a lot of firm mergers and sales going on right now too. It's like, I don't have a succession plan. I've, you know, the associates that are… that all have become junior partners don't want to step up to be, you know, equity owners, don't want to take this over. So therefore I need to find somebody that can buy me out, you know, that do that. So you're seeing a little bit of a trend there, which we've never seen so many law firm sales, you know, going on in the past. But internal succession, the fact we're writing a new book on internal succession planning, as we speak, hope to be out later this fall, but how do we build the system to bring that associate from baby lawyer all the way up to being sitting at the table and making decisions? And we're going to, you know, take, you know, the life cycle of that and how to teach them along the way. A lot of it has to do with stress. Again, go back to the financial stress. You know, if you're making that buy-in too high, if they're already, you know, trying to build a family, you know, et cetera, you're going to have to look at alternative ways to get people to step up and take over, as far as succession. But right now, immediately, I say Origination Credit is the biggest ticket on compensation systems of making sure that transition, I always call it follow the money, follow the money and see where it's going and you'll know where your issues are or not, right? Good issues and bad.

Elise Holtzman: Yeah. And look, there are so many lawyers who don't want to give up origination credit. You talked about this lifetime origination credit. My joke is, you know, somebody develops a relationship, comes in and says, I brought in this client. And the next morning you have someone standing in your office saying, but I touched that client in 1979. And this is my origination credit. And, you know, if that's the approach you're going to take, you are going to run into more of these challenges where people say, you know what, there is no room for me here at the top. They're not willing to let go. They're not willing to recognize that the client that they touched in 1979, you know, retired 20 years ago or, you know, moved on to something else. And I'm trying to help build the firm and they're not valuing that.

Brenda Barnes: So, you know, that's and, you know, I mean, there's some there's truth to that, absolutely. And, you know, the other thing is that, you know, origination, you know, those firms that say, well, we just don't… we don't reward on origination. And I think there's a downside to that too, because those rainmakers need to be rewarded for going out and putting in that time and bringing in those big clients.

Elise Holtzman: No question. There's a tremendous amount of time. I work with rainmakers all the time, that's a huge part of my business. And they are putting in tremendous time and energy and sometimes throwing their own money at it. And they're out at night and they're trying to come up with ways to deliver value to the client and get to know people. And that's where some of the, I think resentment can sometimes creep in, is when you say, well, look at everything I'm doing and no one's recognizing it. No one's willing to pay me more, because I'm doing this. And so, you know what? Maybe I will just go home every night and be with my family and not put in this kind of effort. And so while rainmaking isn't right for everyone, we want to reward and motivate and inspire the people who are excited about it and do want to do it.

Brenda Barnes: Well and rainmakers and you know this better than anyone, they've got an internal mechanism that motivates them like no other, right. So they won't just go home, I don't think and sit and say oh well then just do it. They're going to leave…

Elise Holtzman: They’ll go somewhere else, yes.

Brenda Barnes: They're going to go find some, because they are about that recognition, that money, that, you know, so you need to reward them, or you're going to lose them.

Elise Holtzman: Yeah, and they're doers and executors, and so they can't just go sit home. Excellent point. Brenda, as we wrap up our time here today, I want to ask you a question that I ask all of my guests at the end of the show. There's a phenomenon called the curse of knowledge, where experts sometimes forget that what is so obvious and natural to them is not at all obvious to others. When it comes to using compensation to support a firm's goals, including things like retention and succession, what's a principle, or piece of advice that may seem obvious to you, but is really important for others, including law firm leaders, to hear?

Brenda Barnes: I would say compensation is not just an accounting system, right? It's a culture system. It tells lawyers what the firm values. And over time, firms become exactly what they reward.

Elise Holtzman: Well, that is a great way of ending our time here together today. That is a really important message for people to remember. And I love how you stated it so clearly and so succinctly. So, Brenda, thank you so much for being here today. It's been a pleasure having you.

Brenda Barnes: Thank you for having me.

Elise Holtzman: I'm going to thank our listeners for tuning in as well. If you've enjoyed today's show, please subscribe, rate and review us at Apple Podcasts, Spotify, or your favorite podcast app. In the meantime, be bold, take action and make things happen. We'll see you next time.