Attorney Performance Incentive (API) FAQ

Attorney Performance Incentive (API) FAQ

Question Contents

1.       Overall, how does the Attorney Performance Incentive (API) work?

2.       Why do more senior attorneys have less Annual Collected Hours required than more junior ones?

3.       How are Collected Hours, Collected Rate and Annual Collected Revenue defined?

4.       What are the important components in the API report that each attorney will have access to?

5.       How are Staff Expectations determined for the Total Expectations?

6.       Using the above example API for an attorney, how is the bonus calculated?

7.       How are Flat Fees handled for the API?

8.       What happens if the attorney meets Total Expectations (total collected attorney and paralegal revenue) but does not meet the attorney Personal Expectations?

9.       Is there a ramp period?

10.  What if I have a quarterly deficit, is it carried forward?

11.  When does a Gravis attorney become eligible for the API?

 

1.       Overall, how does the Attorney Performance Incentive (API) work?

  1. API is a performance incentive model with collected revenue as the singular metric.
  2. For an attorney to be eligible for a quarterly API bonus the dollar revenue of Total Expectations for the quarter must be exceeded.
  3.  Quarterly Revenue Total Expectations are the sum of
    1. The Attorney Minimum Production Standards outlined below by Title (Job Band)
    2. The dollar value of Paralegal Staff Expectations usage as defined below in section 5.
  4. As a performance incentive the attorney receives 75% of every dollar of revenue over Total Expectations (an example is in section 6)
  5. The API bonus will be calculated quarterly after Gravis financials are closed for that quarter.
    1. After API bonus payment calculation is complete, it will be paid out in two equal monthly installments on the first of the successive months.
    2. For example, if the payment calculation is completed and verified during April the equal payments will be on May 1st and June 1st.


2.       Why do more senior attorneys have less Annual Collected Hours required than more junior ones?

  1. It recognizes that more senior attorneys have non-billable time devoted to areas such as business development and mentoring.
  2. Also, given the higher Collected Rate of a more senior attorney they still have the highest Annual Collected Revenue targets.

3.       How are Collected Hours, Collected Rate and Annual Collected Revenue defined?
  1. Collected Hours are the invoiced hours, after discounts, which result in a cash payment received by Gravis.
    1. Collected hours include flat fees as described below in section 7.
    2. On average the invoiced hours are typically 10-15% greater than the cash collected due to gaps in collections and client payment. Attorneys should plan to work more than the minimum hours collected to achieve the overall collected revenue targets.
  2. Collected Revenue is the sum of all dollars collected through hourly, contingency, and flat fee invoicing.
  3. Effective Rate is Collected Revenue (attorney) divided by the Invoiced Hours of the Attorney

4.       What are the important components in the API report that each attorney will have access to?
  1. Dark blue is Personal Collections (Collected Revenue) for the individual attorney.
  2. Light blue is Staff Collections (Paralegal and Senior Paralegal Revenue)
  3. The purple dotted line is the minimum Personal Expectations of Collected Revenue required to be eligible for a quarterly based API bonus based on title and job band.
    1. This will not vary unless job title and job band change.
  4. The orange dotted line is the minimum Total Expectations required to be eligible for an API bonus which includes the use of Paralegal and Senior Paralegal support.
    1. This will vary based on the amount of Paralegal support used.
    2. Use is defined as the time an attorney utilizes paralegal support staff for invoiced work at the rates described below in section 5.
  5. The six light green squares in the lower right-hand corner of the report if clicked on links to detailed reports based on each green square metric.
    1. All data for these reports comes directly from Clever Case
  6. The large bold dollar amount above the green squares is the attorney’s calculated bonus.

5.       How are Staff Expectations determined for the Total Expectations?
  1. It is the total of hours invoiced for paralegal and senior paralegal usage at the following rates.
    1. Paralegal Expectations rate is $100/hr (actual targeted invoice rate is $150/hr)
    2. Senior Paralegal Expectations rate is $115/hr (actual targeted invoice rate is $175/hr)
    3. For example, if you use 20 hours and 15 hours respectively of Paralegal and Senior Paralegal the Staff Expectations total would be:
      1. (20 x $100) + (15 x $115) = $3,725
    4. Staff Expectations will not include other support staff such as office or legal assistants.
  2. Paralegal and Senior Paralegal collected revenue (“Staff Collections”) is attributed to the Primary Attorney on the matter. 



6.       Using the above example API for an attorney, how is the bonus calculated?
  1. 75% of Revenue Collected above the Total Expectations is an API bonus for the attorney.
  2. The calculation is as follows.
    1. ((Personal Collection plus Staff Collections) minus Total Expectations) multiplied by 75%.
    2. In numbers the above is (($129,510.48 + $14,335.00) -122,130.00) x 75% equals $16,286.61 performance bonus

7.       How are Flat Fees handled for the API?

  1. The total flat fee is entered as one Flat Fee Billable hour.  Put another way it is one hour of invoiced time at the total flat fee.
    1. The attorney is credited with the total flat fee as collected revenue.
  2. Tracking attorney time spent on flat fee work is entered under hourly non-billable.
    1. Paralegal time spent on flat fee work is counted at the rates of 105 and 125 respectively for paralegals and senior paralegals.
    2. Support staff at the same percentages.
  3. A Flat Fee can be shared with two attorneys.  One attorney is designated as Primary and the other as Secondary.
    1. Primary Attorney enters x% of the one-hour Flat Fee as flat fee billable. (e.g. 80%)
    2. Secondary Attorney enters x% (e.g. 20%) of the one-hour Flat Fee as flat fee billable.
    3. Whoever is set as the "Primary Attorney" bears all paralegal cost.  The Secondary attorney does not have any paralegal cost.
    4. Example: Two attorneys and support staff work on a $5,000 flat fee where Attorney A agrees to 80% of the fee and Attorney B 20% of the fee:
      1. Attorney A elects to be the “Primary Attorney” in Clever Case and bears all support staff expectations.
      2. Attorney A enter 0.8 hours x $5,000 Flat Fee Billable on a timecard.
      3. Attorney B is the “Secondary Attorney” in Clever Case and bears no support staff expectations.
      4. Attorney B enter 0.2 hours x $5,000 Flat Fee Billable on a timecard. 

8.       What happens if the attorney meets Total Expectations (total collected attorney and paralegal revenue) but does not meet the attorney Personal Expectations?
  1. As a performance incentive the attorney receives 35% (instead of 75%) of every dollar of revenue over Total Expectations
  2. Using the below example, in which the Attorney fell short of the Personal Expectations goal calculation, the calculation:
    1. In Words is: (Personal Collection plus Staff Collections) minus Total Expectations) multiplied by 35% equals the performance bonus.
    2. In Numbers is: ((111847.09+43504.86)-149405.50)*35% equals $2,081.26 performance bonus

  

9.       Is there a ramp period?

  1. There is a ramp period during Q2 and Q3 2025. Attorneys who meet 85% in Q2 and 92% in Q3 of their personal collection will be eligible for a bonus.
  2. As noted above, the gray dotted line in the report is the 85% Expectations based on Title and Job Band will be eligible for an API bonus.
  3. The ramp period is designed to allow Attorneys to familiarize themselves with the new system. 

10. What if I have a quarterly deficit, is it carried forward?

  1. Yes, quarterly deficit is carried forward to future quarters and the minimum Expectations for earning an API bonus is raised accordingly.
  2. Attorneys who are eligible for the 35% performance incentive as described in Section 8 will not incur a carry-over deficit.
  3. Deficits will not be carried over during the ramp period described in Section 9 for Q3 2025

11. When does a Gravis attorney become eligible for the API?

  1. Attorneys become eligible for the API program after one year of service and established consistency in meeting collected revenue objectives.
  2. Overall timing is ultimately discretionary of Gravis management.


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