Unlike in years past, many law firms now seem to feel that
their benefits programs need to be on a par with other firms rather than having
to outdo those offered by their competition. There also seems to be an awareness
that there is value in investing in professionals and staff already working
in the firm at least until the economy has hit full recovery and job growth
continues to sustain itself over the next few years. The biggest challenge
some law firms are encountering is effectively communicating the benefits they
provide to their professionals and staff in a way that compares favorably with
In a policies and practices survey conducted by Mercer in
2003, data was gathered from approximately 600 large and mid-sized organizations
throughout the country. Of the top 10 concerns listed by human resource professionals,
many have remained the same over time; however, the prioritization of those
concerns has shifted fairly significantly over the past five years. In working
with law firms, it is clear that many of these concerns are transferable to
the legal community and may help to frame the evolution of new benefits policies
and programs for law firms looking to attract and retain top-notch lawyers
Top HR Concerns
(Mercer Policies and Practices Survey, 2003 Results and comments)
1. Managing Benefit Costs. With all the changes in
the economy and the increase in healthcare costs, it is no great surprise that
this is a top concern. In previous surveys over the past five years, this was
a secondary or tertiary concern among professionals. Although there has been
an apparent plateau in insurance rate increases over the past 12 months, a
national trend of 12-13 percent increases is very significant, especially in
larger law firms.
2. Employee Morale. Employers struggled with ways
to keep employees happy in the late-’90s when there was a tight labor
market, and then with the economy weakening, morale became more of an issue
with layoffs and the subsequent recession. Recently, law firms have had to
confront a cap to the pay structure for new associates in the wake of years
of dramatic pay increases. Pulling in the reins on salary increases and keeping
people motivated has become quite a challenge.
3. Retention of Professional Employees.
4. Accuracy of Market-pricing Data. This is an interesting
dynamic that was barely on the list of concerns five years ago. With the advent
of access to the Internet in the workforce, employees have the ability to obtain
survey sources with market pricing standards for compensation. As a result,
many employers find themselves needing to justify their pay levels to employees.
It is very easy for all staff and attorneys to know what fair market value
is for their respective job positions and many employees are making this information
part of their review process to obtain salary or benefits increases.
5. Relationship between Pay and Performance. While
this concept is still of great interest to employers, many have found it difficult
to measure performance and document it in connection with compensation.
6. Competitiveness of Total Compensation Package. Employers
seem to be taking a more holistic approach to their “reward” programs.
Career opportunities, benefits and pay are being looked at more broadly than
in years past. “Quality of life” is becoming as important to employees
and associates as salary was in the past. Many firms are concerned with providing
adequate paid time off and other similar benefits to engender loyalty and satisfaction
among employees in their workforce.
7. Productivity of the Workforce. With the economy
remaining fairly stagnant over the past few years and some firm’s revenues
following suit, it has been difficult for many organizations to grow. Many
employers are trying to increase or keep revenues steady with fewer employees
and by maximizing their internal efficiencies. One of the reasons some companies
and firms are able to do so is that they invested very heavily in technology
during the ’90s, which allows them to maximize the efforts of existing
8. Competitiveness of the Benefits Package. While
this may not be the primary issue in attracting and retaining quality people,
it can be the tiebreaker between one law firm and another. Most employees do
not expect the benefits to be much better than the marketplace, but it is very
important that they are in line with other law firms in their geographic area
and size range.
9. Internal Pay Equity.
10. Recruiting and Retaining Skilled Technical Workers. The
survey also included a “compensation/benefits checklist,” which
asks employers to reveal how they have reacted to more than 100 compensation
and benefit programs. A few of the top benefits reportedly added recently include
annual computerized benefit statements and long-term care insurance programs.
Some of the benefits most frequently dropped included indemnity health insurance
plans and pension plans.
R. Dane Rianhard is Coordinator of Group Benefits for FranklinMorris, exclusive
Coordinating broker for the Bar Associations Insurance Agency, Inc. For more
information regarding benefits programs, visit MSBA online at www.msba.org/departments/membership/baia/.