The Firm Didn't Need More Revenue — It Needed Better Incentives
One of the most common assumptions I hear from law firm owners is:
"We just need more revenue."
And sometimes that's true.
But many times, revenue isn't the problem.
The real issue is how the firm is incentivizing people.
Because even talented attorneys will make decisions that align with their compensation structure.
And if the incentives are misaligned, the firm often ends up with:
poor collaboration
inefficient workflows
frustrated clients
compressed profitability
All while generating plenty of revenue.
Revenue Doesn't Solve Structural Problems
When a law firm experiences challenges, leadership often looks outward.
More marketing.
More business development.
More referrals.
More revenue.
But additional revenue doesn't automatically fix:
inefficient systems
poor role alignment
compensation conflicts
operational bottlenecks
In some cases, it simply magnifies them.
Incentives Drive Behavior
One of the most important lessons I've learned working with law firms is that people generally do what they're rewarded for doing.
Not necessarily what leadership wants them to do.
Not necessarily what is best for the firm.
What they're rewarded for doing.
That distinction matters.
Because even well-intentioned compensation plans can create unintended outcomes.
A Real-World Example
I worked with a firm that had an attorney who was exceptional at generating business.
They were:
highly connected
well respected
strong relationship builders
excellent rainmakers
New opportunities consistently flowed into the firm because of their efforts.
The challenge wasn't bringing work in.
The challenge was what happened after the work arrived.
The Wrong Person Was Doing the Wrong Work
Like many firms, the compensation structure heavily rewarded both origination and servicing.
As a result, this attorney continued servicing a significant amount of work personally.
The issue?
Servicing wasn't where they created the most value.
While they were excellent at business development, they weren't as strong at:
responsiveness
project management
day-to-day client service
operational execution
And because compensation rewarded servicing, there was little incentive to transition work elsewhere.
The Problem Wasn't Revenue
The firm had revenue.
The firm had demand.
The firm had talent.
The issue was alignment.
Leadership was asking the wrong person to spend time on the wrong activities.
And the compensation system was reinforcing it.
We Changed the Incentives
Instead of expecting the attorney to continue doing everything, we redesigned the compensation structure.
The new model placed significantly greater emphasis on origination.
The attorney focused more heavily on:
relationship development
networking
business generation
strategic client interactions
Meanwhile, more servicing work flowed to senior attorneys whose strengths were in execution and client management.
The Results Were Immediate
The outcome wasn't just better operationally.
It was better financially.
Clients experienced:
improved responsiveness
stronger communication
more consistent service
The firm experienced:
increased leverage
stronger margins
improved profitability
And the originating attorney was spending more time in the area where they generated the greatest value.
The Surprising Profitability Impact
One of the most significant benefits was something leadership hadn't fully anticipated.
The servicing work was now being performed by senior attorneys who were largely compensated through salary rather than significant variable service compensation.
As a result:
servicing costs decreased
leverage improved
margins expanded
Without adding new clients.
Without increasing revenue.
Without increasing headcount.
The Firm Didn't Need More Revenue
This is the lesson that often surprises people.
The firm didn't need:
more leads
more clients
more matters
The firm needed:
better alignment
clearer roles
stronger incentives
The revenue was already there.
The opportunity was hidden inside how the work was being structured.
Great Firms Create Complementary Roles
The strongest firms rarely expect every attorney to perform every function equally well.
Instead, they create room for:
Rainmakers
People who generate opportunities.
Servicers
People who execute exceptionally well.
Hybrids
People who can do both.
And then they align compensation accordingly.
Growth accelerates when compensation supports individual strengths rather than fighting against them.
The Real Question
Instead of asking:
"How do we generate more revenue?"
Ask:
"Are our incentives encouraging people to spend time where they create the most value?"
Because those two questions often lead to very different solutions.
If your law firm's compensation structure is creating inefficiencies, limiting collaboration, or preventing attorneys from operating in their highest-value roles, it may be time to evaluate whether your incentives are aligned with your goals.
I help law firms design compensation systems that support profitability, collaboration, and sustainable growth while leveraging the unique strengths of each attorney.