Salary at stake: an incentive for tenfold growth

30 September 2019

Ten years ago, LEAP Legal Software had 27 employees - that's how it grew in its first 14 years in business. Today, her team has 300 employees and an annual revenue of $50 million. LEAP has been able to radically accelerate its growth by tying pay to quarterly goals.

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Richard Hugo-Hamman, Chairman of the Board of Directors of LEAP Legal Software, does not worry that Generation Y members of his team will get bored and quit their jobs. They often change jobs because the company is growing so fast.

My global manager is 25 years old," says Hugo-Hamman, "and she leads 27 employees around the world. One of the great benefits of a company's rapid scale-up is that you offer incredible career opportunities to young people.

This was not always the case. LEAP was founded in 1992 in Sydney to produce software for small (up to 40 people) law firms, and as we already know, it had only 27 employees by 2006.

The company's expansion began to gain momentum when in 2006, on the recommendation of the business coach, quarterly meetings on strategic planning began to be held. At these meetings, the company set five main priorities. Each employee of the company, including the receptionist, was assigned five main tasks to help the company move towards its goal.

Since then, LEAP Legal Software has been in a state of explosive growth. Today, the company employs around 300 people based in the U.S., UK, and Australia. In these three markets, the company earns $50 million a year. Meanwhile, it has developed several strategic subsidiaries, including the 400-employee InfoTrack technology company with its cloud platform, which provides lawyers and other professionals with a smart search engine and automated workflow, generating an annual revenue of $150 million. The total number of staff in all these business units is about 850 people.

As you work, you will get a lot of work done

Having spent about two and a half years defining quarterly goals, LEAP Legal Software realized that employees would be more motivated to achieve these goals if the salary of the team's management depended on it. "The only and most important thing I keep an eye on as I try to continuously improve my company is the effectiveness of management," says Hugo-Hamman.

LEAP has created a system in which 50% of each employee's income is their base salary and the rest is their various bonuses. This has changed the situation dramatically," recalls Hugo-Hamman, "and we have established a link between the strategic plan model and senior and middle management remuneration.

Last year, the company's quarterly goal was to bring its products to the Amazon East Coast server in Virginia. Thirty-two of our employees have been assigned five priorities to achieve this goal. The tasks were completed on time and the goal was achieved.

Since most of the employees at that time started with basic salary and received traditional bonuses, the new approach was implemented gradually. For employees hired under the traditional payroll system, the company stopped the traditional annual bonus payments and increased the percentage of salary as a performance bonus without increasing the basic salary. "Our goal is to achieve a 50/50 ratio," explains Hugo Hamman.

For new employees, wages are based on basic salary and incentive payments from the start. We explain that this is how we pay employees," says Hugo Hamman, "and then we gradually shift them to a 50/50 ratio.

Mid-level managers and executives can use their bonuses to further motivate them to buy the company's shares. To date, more than 130 employees are shareholders.

In one sled.

The beauty of the LEAP system is that every employee feels when the company makes a mistake and fails to achieve its goal. Of course, this is cruel," admits Hugo-Hamman, "when a company fails to achieve its five priorities, it will ricochet all employees.

But this harsh reality is forcing us to make more informed decisions. According to Hugo-Hamman, "it's enough that it happens every two years - and everyone will try their best to make it work.

Of course, that doesn't mean that no one misses from now on. The company sets ambitious goals for each quarter. According to Hugo-Hamman's assessment, we manage to achieve four or five goals per quarter: "Sometimes we make big mistakes.

Each employee evaluates for himself whether he or she has achieved his or her own five goals. From time to time, someone tries to overestimate themselves," says Hugo-Hamman, "but the verdicts are brought to the attention of the general public, and this makes employees evaluate themselves honestly.

Rhythm of communication

Behind the quarterly targets system are daily meetings, which are included in the work schedule at the same time as the company begins to formulate tasks.

Each unit has a senior management meeting," says Hugo-Hamman, "and given the different time zones, these meetings can happen to me at any time of day or night.

Team members who are driven by the desire to achieve their goals and maximum salary bonuses do not hesitate to call each other during the most unconventional hours. "The people in the teams created to achieve the five most important goals are very attached to each other," says Hugo Hamman.