Shyamal Verma SHRM PC20200364

Section B

Situational Analysis:

Brainard, Bennis & Farrell (BBF) is a law firm founded in 1963. The idea was to create a "Harmonious
Place" where great legal minds can work together and deliver excellent legal services. The firm's
initial few years were excellent in business as many clients followed the founding members to
Connecticut. The idea of a "harmonious place" seemed to work, and the firm was able to attract top
graduates from leading law schools and Fortune 1000 clients. The two primary reasons for the
growth in the initial years were:

1) Referrals from existing clients: Since the firm had loyal clients that followed the founders,
the firm could harness that momentum by referrals.
2) Location: Many Fortune 500 companies were moving their headquarters away from new
York at that time and to the location where "Brainard Group" was located.
3) Initial Culture: In the beginning, the coordination among the partners and other employees
was high, the firm was highly client-centric, as mentioned by, "We tend to over-lawyer our
briefs" and followed a democratic system in the selection of partners, thus avoiding
conflicts.

However, as the firm grew larger and the competition began to rise, the firm culture and
atmosphere began to change. These changes in effect with the compensation system of the firm
resulted in challenging issues:

1) Generational Split: Although the junior partners still come from Ivy League schools like most
of the partners in the old days, the social strata are different, resulting in a generational
Split. The Old partners prefer to see the law as a profession, whereas the younger prefer to
see it as a business.
2) Long-term Relation vs. Individual Transaction: The corporate practice believes in long-term
relations, and much work there depends upon other departments; the new business usually
comes through word of mouth of existing clients. Whereas in litigation, the focus is on
aggressive individual transactions.
3) Compensation System: The firm's compensation system favors seniority, and it is
inadequate to include all types of employees and roles they perform. The main problem lies
In difficulty in deciding weights of Seniority vs. Performance. Many high-performance
employees how can solve the problem quickly are getting low compensation because of the
low time they spend on the case.
4) Competition: The competition is rising; the firm has already lost one of its employees to a
competitor firm and is risking losing others due to resentment of high-performance
employees from the existing compensation system. The costs are rising, and the form has to
focus on business getting, efficiency, and productivity.

Is it a Zero-Sum Game?

The tradeoff can be seen as a share of compensation between seniority and performance. At first
glance, it looks like it is a zero-sum game. However, a zero-sum game assumes that the "money
remains constant," which is not the case. In fact, it is decreasing due to an increase in competition
and costs and can be increased with more revenues. Therefore, the situation is not a zero-sum
game. Hence, the focus of the firm should be on expanding the size of the pie.
Shyamal Verma SHRM PC20200364
Section B

Where Should Firm Focus? -- Employees

From the Performance-Capability Matrix below, it is evident that the firm should focus on high-
capability employees. Since High capability employees have high future growth potential, they can
also be beneficial for the long term. However, BBF seems to be in the High Capability-Low
Performance region right now. Since many partners in BBF are from Ivy League schools, it suggests
that the capability is high, but the firm's performance is low, as hinted in the case. Hence the
problem may lie in the organizational structure or firm functions.

Problem Analysis:

The two most essential features managers should have and should always focus on are :

1) Knowledge about his field

2) Ability to Understand Context.

Context:

The main business functions of BBF are discussed below,

Corporate practice: For BBG the success of Corporate law functions relies on long-term relationships
with the clients, which are companies. The Relationship between two parties depends upon two
things, these interdependencies can be explained as:

a) What I have to give?: The client expects the firm to be emotional, physical, and Mentally
invested. The firm should be able to deliver consistently excellent performance to the firm
along with priority, the client expects the firm to give discounts and extend credit when
required, and It should also be able to assist the client in additional legal matters.
Shyamal Verma SHRM PC20200364
Section B

b) What do I get?: The BBG expects a good amount of business from the firm and "Word-of-
mouth," i.e., referrals to other companies and hence more possible clients.

The compensation depends on the ability to build relationships and sustain those relationships.
Sometimes, the lawyer may have to do some extra things to maintain relationships with
companies, which, in turn, brings more business to the firm. Since the companies' additional
services may require different functions, colleagues act as collaborators, and employees respect
seniority. The appropriate compensation system is fixed for this function with components
dependent on seniority and some component based on performance.

Litigation Cases: The success depends upon the ability to handle cases here, i.e., win ratio and
the ability to stall in some cases. The business relies heavily on a lawyer's capability, and usually,
a high upfront fee is charged. The compensation here is determined by the reputation and ability
of the lawyer and not the firm. If the firm tries to take more cuts from the lawyer's fee, the
lawyer might leave. BBF only provides litigation support and takes some share for this. As
mentioned above, litigation success depends upon performance and ability to close a case in
shortest possible times efficiently. Hence, the colleagues act as competitors in this case. The
appropriate compensation system is Variable pay based primarily on performance.

The core of the problem

As discussed above, different functions require different skills and expertise based on the nature
of the job. Hence, a standard compensation system won't work effectively for BBF. Initially,
when BBF was established, most of the clients were companies and therefore required
colleagues to work harmoniously and respect seniority. However, over the period, the firm
began expanding in litigation, and BBF hired more litigation lawyers where layers build their
name and focus on individual transactions.

Hence sometimes diversification can lead to substantial changes in organizational structure. As a

result, the performance of the form might get affected

Possible Solutions:

1) A possible solution is to identify the consumer demands and needs and specialize in those
functions. However, it might be possible that both litigation and corporate function are
essential for BBF and contribute considerably to the company's revenue streams. Moreover,
many cases that come under corporate function might require litigation services and vice
versa. Hence, both functions are interdependent.
2) Another possible solution is to break the firms into two units that specialize in Corporate law
and litigation. However, it can be challenging to incorporate collaboration among the two if
one of the companies requires the other's support.
When firms are separated physically, social mechanisms are required to maintain
collaboration. Some of the possible social tools that can be implemented are:
a) Employee exchange: the two units can implement employee exchange to help
understand each other's roles and functions.
b) Exclusive service: It can be made compulsory that both units provide priority service to
the other team whenever required.
c) Periodic Meetings: there can be regular meetings where both the units can discuss
trends, challenges, and goals. As ultimately both are law firms and hence face no issue in
communication or understanding.
Shyamal Verma SHRM PC20200364
Section B