Comparisons need not be Odious – Assessing and Rating Lawyers

Most lawyers are reluctant to score, grade or rate their people. They perceive that if you score low, it can result in an argument; if you mark high, it can make the rated individual complacent or arrogant.  Most raters tend to play it safe and mark somewhere in the middle, an averaging issue that can make the entire scoring process rather pointless.

 There are also other difficulties to be overcome in the rating process

Lawyers generally expect to see full details of the evidence presented and assessed – lack of trust usually means that a rating process can be long drawn out and complex if just based on soft or subjective factors.  Furthermore, ratings tend to look at achievement of the measurable objectives or the attainment of key performance targets rather than the value added to the firm by the lawyer’s contribution.  However consistently set and defined, the attainment of objectives are not the only factors which influence success.

Rating and Scoring Models

Even when a balanced scorecard approach is used, there are many models for an overall assessment. There are some firms in which the profit sharing and compensation allocations are done very informally or even by annual negotiation.  I have heard of one firm where each partner anonymously submits his rating of himself and his partners and the whole result is pooled.  However, where firms have achieved systematic assessment processes, they seem to fall into one of six main types  

Model One – Simple Rating

 Under this approach, lawyers are rated in overall terms typically on a four to eight point scale from ‘excellent’ downward.  The median point defines average performance and above this point, partners are doing better than expected.   Some firms take trouble to analyse ‘average’ performance by examining the performance of the whole cohort of partners and establishing a middle point. 

Model Two – The Nine Box Matrix

 Another method is to categorise partners or associates on a matrix which matches effort with overall contribution.  This approach is sometimes known as the “Ernst & Young Nine Box Matrix”.

The whole thrust of this method of assessment is that there is no attempt to mark or score each area on the balanced scorecard or critical area of performance.  Instead, an overall rating is made having considered performance in the round, and in particular the value of each lawyer’s contribution to the firm’s progress.  There is no attempt to create a prioritised league table, and it would be perfectly possible for every partner to be rated as excellent or in the top band. 

Model Three – Overall Rating and Scoring

 Under this model, each of the firm’s agreed critical areas of performance or balanced scorecard would be scrutinised and rated as with Model One.  The grades attained by each partner in each critical area of performance are then converted into an overall score which enables partners then to be banded according to their scores. 

Some degree of subjective moderation then typically takes place to ensure that the bandings have achieved overall fairness, and there is often some intuitive forced ranking involved in setting both the bandings and the eventually allocated points.

Model Three – Moderating the Scoring

 In some models, one or more performance areas can be weighted to give a higher weighting than for other areas, although care has to be taken to ensure that a high weighting for any one category is not disproportionate.  Additionally, a high weighting on one category means that a partner could do well by focusing on only a few critical areas of performance, but if all are important then partners should at least perform to expectations in all of them. 

Model Four – Forced Ranking

Under a forced ranking approach, partners are placed in one of a number of levels in each of the critical areas of performance, relative to all other partners.  One such approach places lawyers into four equal quartiles.  Only 25% of the cohort can be in any one of the quartiles.  Put bluntly, the firm has to define the 25% of the cohort who are the worst performers and who will therefore populate the bottom quartile.

The argument in favour of forced ranking is that it creates a true meritocracy by differentiating lawyers on the basis of the articulated criteria required for success in the firm. 

Model Five – Weighted Scoring

 Allocating scores, rather than banded ratings, has never proved easy within law firms but some firms have introduced this successfully, Points are allocated to each area of the Balanced Scorecard, and there can be some elements of weighting.  If, say, 40 points are allowed for financial management, those points can then be divided up to allow a possible 10 points each for revenue, chargeable hours, the management of lock-up and contribution to team performance. Lawyers can then be marked in each area and the scores aggregated on similar lines to Model Three.   

 Model Six – Overall Judgement

 It seems that the most popular method of assessing lawyers relies on a group of trusted individuals weighing up all the evidence and data and reaching some overall conclusions on the basis of the data which they have.   The judgement is made holistically rather than atomistically.   There are no fixed weighting or scores as the thrust of this approach is to produce a qualitative assessment not an entirely quantitative one

None of these models are either right or wrong.  Some firms, for example, love the forced ranking approach whilst other firms are horrified by the perceived brutality of it.  Which model (or variant of models) is used will depend on the culture, context, size and strategy of the firm.  But all rely on honesty, transparency and the careful collection and monitoring of as much data and as many metrics and measures as can easily be obtained.  Any system of rating or scoring has to be not only fair but seen and trusted as fair – no easy feat.  In part this is down to the credibility of the firm, its values and the credibility of the management team.  In part it is also down to the assessment itself being properly and professionally conducted, and this can take up a huge amount of management time

.A slightly shorter version of this article was published in the May 2014 Edition of Managing Partner Magazine and is reproduced with their permission