Question: 

Our firm is a 14 lawyer firm in St. Louis, Missouri that focuses on small businesses – both transactional and litigation matters. There are eight equity partners, two non-equity partners, and four associates in the firm. We are managed by a three member management committee and a firm administrator.

While we have been successful over the past fifteen years since the formation of the firm, we are experiencing numerous issues including:

  1. Defections of partners, associates, and others leaving the firm.
  2. Difficulty in finding, hiring, and retaining attorneys and staff.
  3. Dissatisfaction by lawyers in the firm concerning the way things are done.
  4. Partners and associates are expressing growing dissatisfaction with firm management and policy.
  5. Lack of faith in the management committee.
  6. Lack of open communication between the management committee and the rest of the firm.
  7. Dissatisfaction with the partner and associate compensation system and the belief that it is unfair. The management committee makes all compensation decisions and the factors that are considered are unknown as well as the performance expectations.
  8. There is a lack of adequate succession planning for the transfer of client responsibility from senior partners to younger partners.

We would appreciate any suggestions that you might be able to offer.

Response:

I understand your dilemma. You are at a difficult size. It sounds like you are facing many of the problems that firm leaders face at your stage of growth. Your leaders must be willing to:

  1. Invite active participation and input from all attorneys concerning matters of firm governance. For example, revitalize the management committee by rotating its membership and limiting tenure and consecutive terms or establish a compensation committee that represents attorneys from all levels of the partnership. Also, give the attorneys a voice in policy determination and other important administrative decisions.
  2. Implement a lawyer career advancement program that outlines a program for attorneys to advance from associate to non-equity partner and then to equity partner. A common complaint that we hear from our interviews of associates is lack of feedback on short term performance and what it takes to “make partner” and how they are progressing toward eventual partnership. During a recent interview an associate told me:
    1. I would like to know: What does it take to become a partner – consideration criteria?
    2. What do I have to do?
    3. What is the timeline for consideration?
    4. How am I doing – am I partnership material?
    5. What does partnership mean in this firm? Will I have a voice?
    6. What are the mechanics of admission? (Is there a buy-in)
    7. Is there a buyout for retiring equity partners?
  3. Set up a compensation system that attempts to be fair and consistent in rewarding all of the lawyers for their total contribution to the firm. Identity and share the specific factors that are considered if the system is a subjective-based or subjective-objective hybrid system. Develop an incentive system whereby attorneys get credit for client their working attorney fee collections, client origination, including enhancement of present client relationships, management of the firm and its practice areas, training of associates and paralegals, pro bono activities, and other nonbillable activities.
  4. Develop a formal evaluation program that will let the attorneys know where they stand and allow qualified associates to progress to partner status. Encourage active participation in pro bono activities, especially ones in which the attorneys have a particular skill or interest.
  5. Assign responsibility for client matters at an early stage in an attorney’s career. Introduce attorneys to the clients as early as is practical. This will enable the attorneys to step into the fray from the beginning and be more involved and informed on client matters.
  6. Establish an ongoing, organized training program for professional growth. This can be done by setting aside time for attorneys to attend CLE seminars or meetings sponsored by other professional groups. Regularly scheduling in-house training sessions, under the guidance of partners with specialized expertise, would develop the skills required to succeed in various practice areas, including business development and management techniques.
  7. Give the attorneys an opportunity to train and supervise other attorneys and paralegals to provide support on specific client projects or in the substantive areas in which the attorneys are involved.
  8. Assist attorneys in building their individual reputations through participation in programs sponsored by the bar association or by writing articles on substantive areas of practice for publication in bar association or professional journals. Encourage their participation in programs sponsored by the firm and other associations, such as accounting firms for clients and prospective clients.
  9. Provide an ongoing forum for the attorneys to participate in discussions with one another concerning client matters (i.e., strategies), research findings, and input on decisions that may affect matters they are working on. Circulate an agenda before each meeting, and include all partners and associates.
  10. Develop a strategic plan that enables partners and associates to determine the firm’s immediate and long-term objectives.
  11. Show care and concern for the professional and personal welfare of both partners and associates as well as staff.
  12. Encourage the opposing viewpoints and consider other opinions.

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John W. Olmstead, MBA, Ph.D, CMC

 

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