Experts & Views
Its that time of the year when suddenly the attendance sheets are almost perfect, the collars crisper, the spirits well guarded and the efficiency or the visuals of professional motion much more swifter. It’s the end of the financial year and thus the time for enhancements in the paypack. And this year, formally, there is no ‘economic downturn’ to cast a suspicious cloud on hopes and future plans. And especially now that the law firms are ‘openly’ boasting about their best performance through the ‘recession’, the young law firm aspirants know that it’s a recession proof sector.
However, in most businesses, including that of law firms, salaries/ retainers/bonuses is kept secret. It is almost universally untested as to what exactly would ensue in a law firm if the fee earners knew what their colleagues, their bosses or – gasp – the Partners were making, officially.
Fundamentally, one of the most important reasons mooted as to why there should not be any such secrecy is that it creates an element of bitter frustration and any unfairness (real or perceived) can’t be addressed directly. People talk, you know. And they would continue to do so whether the management likes it or not. And more so when it comes to lawyers, that’s all they talk about. Especially if they are not the court going types. As George Simmel (first generation of German sociologists) aptly states that Secrecy sets barriers between men, but at the same time offers the seductive temptation to break through the barriers by gossip or confession.
Well, secrecy is the enemy of efficiency and we all know it. The Right to Information Act , 2005 was brought about after so many years of concerted struggle by numerous lawyers and activists, among others, to break through the shield of secrecy wielded by the government against the exercise of fundamental right by a citizen. Thus, we all understand the element of efficiency in transparency.
Getting back to the topic.
Opening up of salaries seems more dangerous in legal workplaces primarily because they may not be currently fair and therefore making them open seems even more dangerous.
The usual reasons cited for variations in paychecks , enhancements and bonus(es ) are X doesn’t do a better job, but because she simply drives a harder bargain when it comes time to negotiate salaries Or sucks up to the boss, Or is aromatic or has some censored pictures from the last christmas office party … never mind.
But that doesn’t seem fair, does it? More importantly, it doesn’t do any good to you and more importantly the Boss is least bothered about how you feel especially because
· There are loads of people dying to take your place at half the price of your secret salary
· No one is indispensable
· Bitterness affects efficiency, don’t be bitter
Go ahead and wait endlessly to reply promptly to the firang client’s email which the Gora would type at his convenience in his time zone (GMT +whatever)
Thus the question remains is whether it makes much more sense to determine salaries/compensations based on people’s value to the organization. (A seemingly difficult proposition with suspicious, argumentative and desperate lawyers on board) Thus the scope of HR increases in law firms (beyond peeved cheesy and uber-stupid peer evaluation sheets)
To discuss HRs and their ‘job policies’ is yet another painful tale so lets not even get there.
But when people agree that openness is better than secrecy, in life, why not in law firm business. Every relationship between two individuals or two groups will be characterized by the ratio of secrecy that is involved in it. In the absence of any provision mandating partnership firms/ LLPs to disclose their profits and disbursements and the same being inaccessible to the public as a ‘public record’, the element of secrecy seems to be an impediment in choosing the law firm employer, be it for a fresher or a lateral. And Mr. Drucker is not of much help. And not all of us are good at ‘game theory at the work place’.
We agree that salaries are a sensitive subject, but whether open communication is important enough and that it should be tested, even if there is a price to pay? It’s at the very heart of a shared culture. If discussion of salaries is taboo, what else is off limits?
In his book ‘The Seven-Day Weekend’ Ricardo Semler says ‘Making salaries open yet another pocket of information that the power-hungry would otherwise use to consolidate their positions – to the detriment of co-workers and the organization’
(it’s a different story whether your partners have ever heard of this book or imbibed the rays of sunlight contained therein, whether they desire to spread their Firm to 60 locations in 30 countries in a span of the next thirty years of their expected life span, create an institution and not just a few rich people.)
Jeremy Bentham said that Secrecy, being an instrument of conspiracy, ought never to be the system of a regular government and I think it ought not to be part of regular governance of law firms either.
As they say, Sunlight is the best disinfectant.
What do you guys think?
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However, in my personal view transparency in hikes (in terms of percentages only) would be welcome both from the firm's perspective as well as from associate perspective. It would send the correct signals and probably let people know where they stand in the firm.
Sreejit
quoting from the DPW website: "Lockstep compensation structure ensures that lawyers work together across the practice and devote all necessary firm resources to client matters with no internal quarreling over business origination credit or fees."
US firms are breaking lockstep only in bad times (as they look to cut costs and avoid lay offs) but have Indian firms done so in the boom years? I find this interesting...
Also, the distinction between litigation associate pay and corporate associate pay (take-home/increments/bonus) is the other downer I feel which I hope will change over time - if this still applies... as firms mature they will have to treat everyone the same.... look at litigation as a hedge against the down times in corporate as litigation tends to be more evergreen...
Lovely piece of information and analysis, I should say.
Am a business writer and currently writing a feature on Salary Secrecy for HRM Singapore, the leading HR magazine in the Asia Pacific. Would love to incorporate your comments if you agree to participate. Could you please email me at [redacted to protect recipient from spam] for me to follow up on this?
Warm regards and many thanks
Ananya Mukherjee
Singapore
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