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By: Olmstead & Associates

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John Olmstead

Latest from Law Practice Management Asked and Answered Blog

Question:
Our firm is a seventeen lawyer insurance defense firm in Austin, Texas. The firm was founded by the two existing partners twenty-five years ago. In addition to the three founding equity partners we have five non-equity partners and ten associates. Non-equity partners and associates are paid a salary and a discretionary bonus. The two equity partners are paid their profit share based upon their partnership percentage which is fifty percent each in the form of distributions dependent upon cash flow. The two of us are considering offering partnership to two non-equity partners with a buy-in based on selling both…
Continue Reading Law Firm Compensation – Compensating New Equity Partners

Question:
I am the managing partner of a twelve lawyer firm in Dayton, Ohio. We are a first generation business litigation boutique. We represent mid-size companies and handle multiple matters for these clients. We  have seven equity partners and five associates in the firm. Three equity partners were the original founders and the other four were made partners later on. All seven partners originate client business and have significant books of business. Three founding partners are in their early 60s. We have had little success in succession planning and it seems that the three partners are reluctant to let loose…
Continue Reading Law Firm Succession – Incentives for Partners to Transition Clients

Question:
I and another partner are the owners of a seven lawyer family law practice in Chicago suburbs. We started the firm twenty years ago after leaving behind a partnership in another firm. Of the other five attorneys there are three non-equity partners and the rest are associates. I am sixty three years old and my other partner is sixty. Both of us are beginning to think about retirement and how we are going to transition out of the practice. Two of the non-equity partners are well seasoned attorneys, have major case responsibility, and bring in client business. We have…
Continue Reading Law Firm Succession – Equity Partnership – Process for Admitting Equity Partners

Question:
I am the owner of a sixteen-lawyer firm in Nashville, Tennessee. We are in our twenty-first year of practice. The firm is a business litigation firm. There are five income partners (non-equity partners) and ten associates in the firm. I hold all of the equity in the firm. While associates and income partners are paid salaries and discretionary bonuses I am looking at other options. I bring all of the clients into the firm and I am trying to change that. I would like to base compensation on origination of new client business – rainmaking if you will. I…
Continue Reading Law Firm Partner Compensation – Client Origination

Question: 
Our firm is a sixteen lawyer firm in Cleveland, Ohio. There are six equity partners, three non-equity partners, and seven associates in the firm. Our firm is a litigation boutique that represents small to mid-size companies. Three of the six equity partners are initial founders and three became equity partners later. All six are in their sixties and plan on retiring at different times over the next three to six years. The firm is managed by the six equity partners. The non-equity partners have no involvement in firm management. The six of us have concerns as we approach retirement…
Continue Reading Law Firm Succession – Management Training for Future Firm Leaders

Question:
I am the sole owner of a twelve-lawyer defense litigation practice in Chicago. We represent automobile manufactures and have approximately ten major clients. I am the only equity partner in the firm and all of the other lawyers in the firm are associates. Two associates are seasoned lawyers with substantial experience and have been with the firm for many years and the other nine have less than five years experience. The two seasoned associates are in their mid-sixties. I am sixty-eight. I just realized that the firm’s office lease expires  in eight months and I have decided that this…
Continue Reading Law Firm Succession Planning & Practice Transition – Have I waited too Long?

Question:  
Our firm is an estate planning practice in the suburbs of Washington D.C. We have five attorneys and six support staff working at the firm. During the COVID lockdowns in 2020, and to some extent in 2021, our attorneys and staff worked remotely. At first we all felt that productivity actually increased. However, after a month or two working remotely we began to change our minds. Communications with each other, review of work, etc. took much longer and once the lockdowns were lifted all of us were anxious to return to the office. We have been working almost exclusively…
Continue Reading Law Firm Remote Work Post COVID 19 – Is Remote Work Here to Stay

Question:  
We are a thirteen attorney law firm in San Diego with four equity partners, three income partners, and six associates. We are a business litigation firm and we are in first generation. The four equity partners founded the firm and manage the firm. A few years ago we held our first retreat. Everyone enjoyed the experience but when it was all said and done nothing changed – no decisions made during the retreat were implemented – and many feel that the retreat was a waste of time. There has been some recent discussions of holding another retreat and several…
Continue Reading Law Firm Year End Retreat – Ensuring that the Effort is Worth the Time Investment

Question: 
I am the sole owner of an estate planning firm in Chicago Suburbs. I have three other associates in the firm. Our volume of business has expanded rapidly during the last six months and we desperately need one to two more associates on board. I have been looking for three months and have been unsuccessful. I have had some leads but when I made offers they were not accepted. Your thoughts would be appreciated.
Response: 
These are tough times for attracting and retaining talent in all businesses. Law firms are having difficulty hiring lawyers as well as staff. Many…
Continue Reading Finding and Hiring Law Firm Associate Attorneys During These COVID Pandemic Times

Question:
Our firm is an eight-lawyer insurance defense firm in Chicago. We represent insurance companies across the ChicagoLand  area representing their insured’s in personal injury cases. Our clients are billed by the hour and we have a wide range of hourly rates based upon the client, type of matter, who is working on the case, etc. We have three equity partners and five associates working in the firm. Currently all of the associates are paid a straight salary and a discretionary bonus. We are having issues with our associates not putting in the billable hours that we need them to…
Continue Reading Law Firm Associate Compensation – Bonuses Based on Hours or Dollars?

Question: 
I am one of three founding partners in a fourteen lawyer firm in Cleveland, Ohio. We are an insurance defense firm with three founding partners, five  non-equity partners, and six associates. We have three primary insurance companies that refer a majority of cases to the firm. All three of us founding partners are in our early to mid sixties and contemplating our retirement and departure from the firm in the next five to eight years. Our lease runs out in eight years and none of us want to sign another lease. Three of our non-equity partners are in their…
Continue Reading Law Firm Succession Planning – Will Your Non-Equity Partners or Associates Simply Wait Your Out?

Question:
I am the sole owner of a five lawyer firm in Indianapolis, Indiana. The other lawyers are associates. Our firm focuses entirely on estate planning and probate and trust administration as well as elder law. I am 60 and do not plan on retiring for another ten years. Two of my associates have been with me for 8-10 years and are vital to my practice as well as my eventual succession and exit strategy. I do not want to lose them so I am considering making them non-equity partners and giving them the title of partner. I am not…
Continue Reading Implementing a Non-Equity or Income Partner Tier in a Small Law Firm

Question: 
Our firm is a six-lawyer family law firm located in the Chicago suburbs. There are two equity partners and four associates in the firm. Approximately five years ago the founder of the firm decided to retire and he sold the practice to myself and another associate in the firm. We just finished making our last payment at the end of last year. We have an associate that we do not want to lose and he has inquired about his future with the firm and partnership. He has been with the firm for two years. My partner and I are…
Continue Reading How/When to Admit a New Law Firm Partner

Question: 
Our firm is an eight lawyer litigation firm in Portland, Oregon. We have three founding equity partners in their early sixties and late fifties, three non-equity partners, and two associates. Recently the equity partners began succession planning discussions among ourselves. Our preference would be an internal succession and transition to the younger non-equity partners in the firm. In our discussions we were discussing buy-in, buyouts, and valuation and one of my partners suggested obtaining a formal valuation. What are your thoughts regarding hiring a business appraisal firm to provide us with a formal appraisal/valuation of our firm?
Response: 
While…
Continue Reading Law Firm Succession Planning – How Important is a Formal Appraisal Valuation of the Firm?

Question: 
Our firm is a twelve-attorney insurance defense firm based in Indianapolis, Indiana. The firm was founded thirty years ago by myself and two other partners. We represent approximately twenty-five insurance companies. Our lawyer headcount consists of three equity partners, four non-equity partners, and five associate attorneys. My partners and I are in our early sixties and just beginning to think about retirement. Two equity partners will retire in the next five years and the third is not sure of his timeline. We would really like to see an internal succession as opposed to a merger with another firm. We…
Continue Reading Law Firm Internal Succession – Non-Equity Partners and Business Development Ability

Question:
Our firm is a 16-attorney, full-service law firm in Denver, Colorado, that works exclusively with small businesses. We have six equity partners, five non-equity partners, and five associates. Three of our equity partners serve on the firm’s compensation committee, of which I am one of the members. Our committee makes compensation recommendations to the partnership for equity partners, non-equity partners, and associates. Since forming the non-equity partner tier a few years ago, we have not changed our method of compensating non-equity partners, which has been salary and discretionary bonus. We are wondering what factors we should be considering and…
Continue Reading Law Firm Non-Equity Partner Compensation