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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…
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…
Question:  Our firm is a litigation defense firm in the Chicago suburbs.  Four of us started the firm 20 years ago and we have since grown to a 16-attorney firm consisting of eight equity partners and eight associates. The other four partners were initially associates and later admitted after they had been here for five to seven years. The other four partners bring in very little business and their production is dismal compared to the four founders. Our associates working attorney receipts are larger than a couple of our equity partners. Our compensation is an equal salary for all partners…
Question:  Our firm is a small insurance defense/corporate litigation firm in Los Angeles, California. We have six partners and seven associates. Our partner compensation system is primarily based upon working attorney collections with no incentives or rewards for bring in clients – client origination. We have been thinking of including client origination as a new metric in our system. We would like to know your thoughts regarding client origination and partner compensation. Response: Here are my thoughts in general. Pros and Cons of Origination Credit Client or matter origination credit is a touchy subject. Some firm-first or team-based firms refuse…
Question:  Our firm is a ten-attorney boutique litigation firm located in Memphis with four partners and six associates. We are in very early discussions with another firm in town that has three partners and four associates. We believe that a merger would improve our lawyer talent base and help us grow. In our last meeting the topic of firm name was discussed and it was an unpleasant discussion. We are concerned that we may have a difficult time agreeing on the name of the firm. Is this a common issues and problem? Response:  Yes. Deciding on a name for the…
Question:  Our firm is an insurance defense firm based in Denver, Colorado. The firm was founded in 2015 by two founding partners and we have grown to a firm of twelve attorneys – two founding equity partners, three non-equity partners and seven associates. Non-equity partners are included in firm management and the non-equity partners serve as members on the management committee. Non-equity members are compensated in the same manner as are equity partners – salary and bonuses determined by three year moving average ratios of weighted working attorney and originating attorney collections. Partner ownership interest does not factor into equity…
Question:  I am the sole owner of a litigation firm in San Antonio, Texas. In addition to myself I have two associates and three staff members. Both associates have been with the firm over five years. I am 66 and am just starting to think about my exit plan down the road. While I am not in a hurry to retire or work less I believe that I should at least be thinking about my options. I would appreciate your thoughts. Response:  I agree that you should begin planning for your eventual retirement and exit from the practice. Anytime a…
Question:  I am the firm administrator of a 16-attorney firm in Kansas City, Missouri. We, like many other firms, have done our best to face up to the challenges presented by COVID-19. For several months, attorneys and staff worked remotely from home offices using the internet, telephone, and video conferencing as the primary means of communications with clients and the office. To our surprise, it worked fairly well, but most of the attorneys were glad when they were able to return to the office. We have been having discussions as to the long-term impact of COVID-19, both in the short…
Question:  I am a solo practitioner in Southern Indiana. I have been practicing law for 43 years and I want to retire next year. My practice is a general practice firm although approximately 80% of my work is estate planning and estate administration. I am the only attorney in the firm and I am assisted by one paralegal that has been with the firm for twenty years. She plans on working for another ten years or so and will need a future home. I am not sure whether there is any practice value, whether I should just close the practice,…
Question: I am a partner and a member of a three member management committee in a eighteen attorney firm in Chicago. During the past year we have discussed conducting an offsite long range planning retreat in the fall that would include the partners and other attorneys in the firm. We have never done this before so this would have been a new experience for us. However, with the COVID-19 crisis we have cancelled our site reservations and are wondering whether we can still conduct our retreat remotely? Any thoughts you have would be appreciated. Response: Sure you can. I suggest…
Question:  I am the owner of a six-lawyer law firm in San Diego, California. Our firm is a business litigation boutique firm. I founded and formed the firm nineteen years ago. The other attorneys are all associates of which one has been with me for over ten years, one over five years, and the other three less than two years. I am 56 and still plan on working another ten to fifteen years. However, I don’t want to lose my senior associates and I want them to be around in ten to fifteen years to take over the firm, I…
Question:  I am a member of the executive committee of a 14-attorney firm in Houston, Texas. We have 10 partners and four associates in the firm. Seven of our partners are in their 60s and we have done nothing to prepare for the succession and transition of our senior partners and have concerns whether we will be able to continue as a firm. Where and how do we start? Response: You need to begin to have some serious discussions with your senior partners as to their retirement goals and timelines and determine how close together their exits will be. Can…
Question:  I am a sole owner of four-attorney, boutique litigation law firm in Chicago. I am 52 years old and looking for a long-term succession strategy for my firm. I have been approached by a large Chicago national firm involving merging my practice with their firm. We have had several meetings and they have provided me with an initial proposal. I have spent many years building my law firm, and, by merging with a large law firm it seems that I am not really receiving any value for goodwill. What are your thoughts? Response:  It is normal to exchange equity…
Question:  I am a partner in a small law firm in Northern Virginia. We are a four attorney firm with two equity partners and two associates. We are interested in acquiring a solo practitioner’s practice that is 60 years old and ready to retire. What are the issues that we should be concerned with before we spend a great deal of time on this matter? Response:  I understand your concern and reason for asking for my thoughts. You must immediately determine the nature of the clientele that you would be acquiring and whether the seller is interested in remaining with…
Question:  I am a member of a three member management committee in a sixteen lawyer boutique litigation firm in downtown Chicago. The firm has been in business for over forty years. We have sixteen lawyers in the firm of which ten are equity partners and six are associates. The original founders are retired and we are in second generation. Until five years ago all partners were involved in all aspects of firm management. At that time we made the decision to put in place a three-member management committee that was charged to handle certain aspects of firm management with the…
Question:   Our firm is a four attorney estate planning and probate specialty practice in Fresno, California. We are in our 15th year of practice. In addition to word of mouth referrals from past clients as well as referrals from attorneys and other professionals, seminars has been a major source of new business for the firm. In fact, for the last several years seminars has been our number one source of new client business. As a result of COVID-19 we are no longer conducting seminars and we have concerns that this is going to have a major negative impact on our…