This column written by Janet Stanton, Partner, Adam Smith, Esq.,
Quick reprise: Earlier this month we launched a new feature on Adam Smith, Esq.: The question of the month. The inaugural question was:
Is “origination” just a nicer term for “sales commission?” If so, does it matter? And are there implications for Law Land?
The results are in (and we’re kinda surprised). First, the numbers – 71 votes were cast, and……wait for it……66, or 93% opined “”origination’” is a nicer term for “’sales commission.’” Only 7% (5 voters) did not agree.
First, a bit of research-nerd throat clearing. Respondents in any research study are at least to some degree self-selectors; they choose to participate. Filling out the survey, driving to the focus group, staying on for the phone interview, etc. This happens for a variety of reasons – usually based on a higher degree of interest in the topic which can skew the results to a greater or lesser degree. (Thank you for indulging the research wonk in me.)
The point is – I’m guessing that those who think of “origination” as “sales commission” may have been more motivated to vote than others. That said, these numbers are pretty amazing.
So, if a large-ish majority of folks believe origination is really tarted-up sales commission, what are the implications for law firms?
For that we have some insights from sage folks who were kind enough to provide comments. Ron Friedmann (full disclosure – a good friend) and JC (a regular commentator on Adam Smith, Esq.) shared similar thoughts that a clearer recognition of what origination really is might encourage “open-minded owners” to bring on professional sales folks who are “incentivized, and well-supported…. However, in many firms only the lawyers are supported and incentivized for origination.”
This touches on a broader topic; a greater role for business professionals at law firms. Simply put, the firms that are inexorably pulling away from their peer pack (in every market segment and geography) are making greater use of business professionals to run the business aspects of their firms, e.g., operations, finance, strategy, technology, talent recruitment/-development, marketing, pricing, and business process optimization. These firms’ leaders recognize (a) the need to run their firms in a more business-like way and (b) lawyers can’t be expected to possess the expertise and training to effectively run these areas. The same would apply to sales.
Another implication is that origination should sunset. This is absolutely SOP in Corporate Land (roughly 98% of the economy, versus Law Land’s 2%); the notion that sales commission would be perpetual is laughable as well as highly counterproductive. We believe the same logic applies to Law Land.
We thank all who voted and provided comments. If you have suggestions for future questions – fire away!