Question:  Our firm is at a crossroads concerning partner compensation. We are a 12-lawyer firm in Richmond, Virginia, with nine partners and three associates. We are in our second generation of partners as the original founders have retired over the years. We do not have a managing partner or management committee – management decisions are made by all the partners. Our compensation is based upon compensation participating percentages set at the beginning of each year based upon the recommendation of a rotating member compensation committee, which must be approved by the full partnership. These percentages are then used to allocate…

Question: I am the firm administrator for an eight-attorney firm in Nashville, Tennessee. I started this position approximately six weeks ago. While I have worked in the legal field for many years as a paralegal, this is my first position as a legal administrator. I have done bookkeeping for several firms over the years. The firm has never had a budget and has asked me to prepare one for the upcoming year. I am not sure where or how to start. Any help or ideas that you may have would be appreciated. Response:  You will want to consider two budgets.…

Question:  I am the owner of a five attorney firm, myself and four associates, in Bakersfield, California. While we are a general practice firm, much of our practice is focused on commercial real estate, estate planning/probate, and corporate/business law. All of the associates have been with the firm over five years. The associates are paid a salary plus a bonus based upon their individual working attorney collections that exceed a quarterly threshold. While there have not been any complaints with this system I am not sure that it is the best system and that I am providing the right set…

Question:  I am the owner of an estate planning firm in the Western Chicago suburbs. My practice is a specialized practice that focuses on estate planning, estate administration, estate litigation, and elder law. While I was a solo practitioner for many years approximately four years ago I brought in an associate that had three or four years experience with an other estate planning firm. Unfortunately, he just gave me his notice and advised that he was leaving to join another firm. We have too much work for me to handle by myself and I am going to need another attorney…

Question:  I am a solo real estate practitioner in Long Beach, California. I have one paralegal that works in the firm. I am 70 years old a would like to retire in the next couple of years. What are my options? Response: Solo practitioners have the greatest challenge since they have no associates or anyone in place to transition the practice. Therefore, the practitioner must both hire and groom an associate that could buy the firm or become a partner and buyout the owner’s interests, sell the firm to another firm, or merge with another firm. Other options would be…

Question:  Our firm is a second-generation insurance defense firm in Bakersfield, California. We have fourteen lawyers, nine of whom are partners. While all of the partners are great trial lawyers, work hard, and bill the required lawyers, none of our partners are good at business development, leadership, or management. Our business comes from the clients that we inherited. Any thoughts would be appreciated. Response:  Successful law firms need at least a few star partners in their ranks. “People are our most important asset” is a standard phrase heard in business. A more accurate and honest statement in many industries might…

Question: I am one of three founding partners in a 12-attorney insurance defense firm in New Orleans. The three of us are in our early sixties and contemplating retirement in the next several years. The three of us have been discussing our succession plans and are wondering whether we would be better off merging with another firm or transitioning the firm to our associates. What are your thoughts on this matter? Response:  A majority of firms prefer transitioning to the next generation of attorneys within the firm whenever possible. Many founding partners at this stage of their career are often…

Question:  Our firm is a twenty-attorney litigation firm in Miami, Florida. We are managed by a three-member management committee supported by a firm administrator. While our committee and our firm administrator are entrusted to make many of the operational decisions, all partners must weigh in on and vote on all major decisions as outlined in the firm’s management plan. Currently we do not have a strategic plan and our firm administrator has suggested that we can accomplish this in a one-day, offsite retreat with all the partners. Is this realistic? Response:  This is a little bit aggressive and optimistic. The…

Question:  Our firm is a sixteen-attorney insurance defense in Louisville, Kentucky. We represent approximately twenty-five insurance companies in property casualty and personal injury cases. We handle products liability and medical malpractice cases as well. Our firm is in its second generation and all of the founding partners have retired. Virtually all of our clients were inherited and none of the existing partners have brought in any new clients since the founding partners retired eight years ago. While we are trying to do what we can to cultivate new clients, we want to ensure that we retain our existing clients and…

Question:  I am a sole practitioner in San Diego, California. My practice is mostly general practice with some emphasis on commercial real estate. I am 64 years old and am looking for a way to transition and exit my practice in the next three to five years. I am the only attorney in the firm however there are three legal assistants that work for me. I have been considering hiring an associate so that I have someone to sell my interests to in the next three to five years. I have never had an associate so I would appreciate your…

Question: I am the newly elected managing partner in our twelve-attorney firm in Chicago, Illinois. Our firm is a business transaction firm that was started by the present four partners ten years ago. While we have an office manager that does the bookkeeping, prior to this year all four partners as a group managed the firm. This year the firm decided to create the managing partner position. Since this is new to me I am trying to learn all that I can about law firm management. My first priority is to help the firm improve profitability and I would like…