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Question:  I am a partner in a three-attorney law firm based in Orlando, Florida. I did a quick Google search this morning and stumbled upon your excellent blog posting – Associate Attorney Compensation.  John did an excellent job answering the attorney’s question.  We have an associate who I like very much; however, heading into her third year with the firm, she has gotten a bit comfortable with our laid-back style of management.  Our situation is similar in many respects to the situation posted by the Chicago attorney. I would like to find out more about whether coaching could help us…
Question:  Our firm is a fourteen partner firm in the northern suburbs of Chicago with ten partners and four associates. We are a general practice firm with different partners focusing on specific practice areas. Our partners’ compensation is determined by a three member compensation committee.  The compensation committee uses a combination of quantitative data based upon working attorney fee collections and client fee originations and makes a subjective determination regarding other contributions that a partner has made to the firm. The problem that we have is the compensation committee does not have a way to effectively measure the other contributions…
Question:  I am the owner of a twelve attorney business litigation law firm in Northern, California. I started the firm fourteen years ago after practicing ten years in a large law firm. While the practice has been fulfilling both professionally and financially, the management side is often a challenge. As I sit here on December 31, 2019 thinking about management challenges that I may face next year I was wondering what you envision the challenges will be in 2020. Response:  The following were the common challenges that owners and managing partners advised us that they faced in 2019: Talent Management…
Question:  We have a 12-lawyer business litigation firm in Chicago. We have eight partners in the firm and we are managed by a three-member management committee that was just formed this year. I am a member of the committee and I am responsible for the general financial oversight of the firm. I am trying to get a handle on law firm financial metrics and especially what are the financial warning signs that I should be aware. If you have an outline or list that you would be willing to share we would appreciate it. Response:  Here is a short list…
Question:  I am an attorney in solo practice in the southwest Missouri. I am 45 years old and I have two paralegals working for me in the firm. The practice is a general practice firm that I started ten years ago. I have been advise that I should have a succession plan. What exactly do I need to be putting in place? Any thoughts that you have would be appreciated. Response:  Due to the number of baby boomers approaching retirement much of my writing has been on succession and exit planning for this group. Based upon your age I think…
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: Our firm is a twelve attorney litigation defense firm in Phoenix, Arizona. We have eight partners in the firm and I am a member of our executive committee. Yesterday at a partner meeting we were advised by four partners that they were leaving, would be starting a new law firm, and would be taking several key clients that they handle with them. A couple of associates and staff members will be going with them. What do we tell people and how do we go about it? You suggestions are most welcomed. Response:  My first suggestion is to move very…
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 the owner of a law firm in the Chicago suburbs that specializes in estate planning. I started the firm twelve years ago. Over the years the firm has grown from just myself as a solo to a firm with myself and six associate attorneys. Prior to starting the firm I worked in several other firms as an associate and as a partner. I felt I was not being compensated for my hard work so I started my own firm. I have always worked hard, and in addition to managing the firm and bringing in all the clients,…