Crystal clear Featured

8:00pm EDT July 26, 2008
Sonny Morris
Co-founder and senior partner, Morris, Manning & Martin LLP

Not paying people what they’re worth can have negative consequences on your company. Just ask Sonny Morris.

Morris recalls the example of a friend, who thought he was underpaid at the law firm where he was working and deserved double his current salary. So the friend asked Morris — co-founder and senior partner at Morris, Manning & Martin LLP — what he thought, and Morris agreed the man was underpaid.

So the man approached his law firm about the matter — and its leaders agreed with Morris. Then they offered to double his salary. And then he resigned.

“If he had not gone and complained, he’d have been under-paid, and they didn’t care,” Morris says. “It didn’t bother them that they were underpaying him and, thus, overpaying others, and that’s unfair.”

Pay equity is just one thing that Morris feels is important to successfully running his $103 million, full-service commercial law firm.

Smart Business spoke with Morris about why it’s important to pay people fairly and why he makes employee salaries transparent to everyone.

Be transparent. Making sure everybody has all the same information makes it easier to lead the organization. I don’t see how you lead an organization where everybody doesn’t have all the facts. You can’t solve a problem unless people understand what the issues are.

The vast majority of law firms are not transparent. For example, there will be four or five partners at the top that control all the financial information and will know what everybody makes, and nobody else will know. Here, everyone knows what everybody makes and why, so that people believe the compensation system is fair, they trust it, and they believe that what they’re being paid is appropriate for the amount of contribution they’re making. You may think you’re entitled to X and only got Y, and somebody ought to be able to explain it to you in a way that’s satisfactory.

It helps retain your employees, and we value long-term employment and relationships. We don’t have a lot of turnover. Turnover is expensive.

Know your clients. Work at understanding what the client is trying to achieve in their business. What are their goals and objectives? We want to understand their legal needs as part of their overall business goals and objectives. Not only do we address the specific problem but we try to do that in the context of how does it fit into their overall business plan.

Go to their offices and spend time in their offices, which you’re not billing for, and figure out if there is anything that can enhance their business.

Learn what are the key central metrics in their business. What are the five or six things that have to go right for them to be a success? All businesses have certain key elements that have to come together in order for them to be successful.

Generally, the more you understand the business, the better able you are to be helpful. You can’t be focused on the money. If you do a good job, the money will flow. If you can help a business grow, then you will have a good client, and a good client will stay with you for years.

Look toward the future. It’s any businessman looking at, is he making something the market wants and will pay a fair price for? If not, then he’s going out of business.

You have to refound your business continually. You’re never finished. Whatever you’ve accomplished is history. It’s not the future.

Some successful businesses take for granted that they’ve succeeded, and that’s when they start to fail. My father had a small textile manufacturing company in the South. He did well through the late ’40s and ’50s and early ’60s, and then a lot of foreign imports came into the market, and frankly, foreign competition could make the same quality product he was making at substantially less than his costs were.

He refused to focus on that, and so 10 years later, he went out of business. His past success caused him to misjudge the future.

Have metrics. You have to keep score. You have to match at least the revenue with the expenses of that day. If you don’t, you will fall behind.

Measure what your performance is against your expenses. Otherwise, you don’t know whether your efforts are being effective. You have to turn your efforts into dollars.

There are four or five key indicators that, if they’re on track, then we’re doing things right. If they’re off, we’re not. If I had 170 lawyers and I knew what the budget was for all 170 and I get a report that shows me that 150 of them are working at budget or better, I know that 20 are not.

If you can identify the right metrics, you can manage the exceptions.

Know your weaknesses. I am the worst hiring person in the world. About 20 years ago, I hired some people that, about six months later, we realized were just colossal mistakes. I went back and thought about it and went, ‘I’m the problem. I just don’t see people.’

A lot of businessmen do this. When they have a need, they want to get it solved, so you make that person who comes through the door into what you want them to be; you hear what you want to hear when you interview.

After you’ve made all the bad hires that I did, you have to figure, I’m part of the problem and not part of the solution. Avoid making the same mistake over and over again. We all have strengths and weaknesses.

HOW TO REACH: Morris, Manning & Martin LLP, (404) 233-7000 or www.mmmlaw.com