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By no means do the economic stability and steady growth of a legal practice ensure harmony in the partner ranks or, for that matter, the contentment of any single lawyer. Managing partners who breathe too easily when reassuring revenue or profit numbers get posted may endanger their firms by ignoring tell-tale signs of disharmony. Law firms have been known to go out of business amid strong financials just as precipitously as when those numbers tumble. Remember Shea & Gould?
The culture of a firm may be its greatest asset for identifying and pursuing both immediate and long-range objectives. Conversely, even as new clients pour in the door, the culture of a firm may be a minefield if it is bound to 1) outdated traditions (“because we've always done it this way”); 2) management styles that are dysfunctional and inconsistent with the desires and expectations of a majority of the partners, as well as the needs and priorities of the firm; or 3) anachronistic philosophies inherited from senior or departed partners that are dismissive of the marketing and compensation programs required to compete aggressively with other financially successful, proactive law firms.
Ideally, law firm management is sensitive to the changing needs of the institution and constantly attuned to the desires and expectations of the partnership about the core values guiding the firm. Those values manifest themselves in the methods for determining and implementing policies, for compensating its lawyers, and for engaging in strategic and marketing planning to compete effectively in its geographic or other markets.
Signs of Trouble
Many managing partners are living somewhere between a fool's paradise and the edge of despair. They know their firm has problems, and they wonder how many more problems, and possibly internecine ones, may be lurking beneath the surface. We've prepared a kind of diagnostic list for such managers, a small compendium of partner complaints to watch for as symptomatic, not merely of personal discontent, but of broader institutional issues.
1. Partners complain, or politely suggest, that they are not being kept informed of firm matters that involve staffing, termination of attorneys, or other matters that may affect particular partners or their areas of practice.
2. Lawyers feel that they are being “manipulated” by management or by a group of dominating partners.
3. Partners balk at being assigned responsibility for performing certain administrative or substantive tasks without being granted adequate authority to accomplish them.
4. The more influential partners are increasingly unwilling to participate in the decision-making process for the firm.
5. At the same time, rank-and-file partners have the sense that they're just being played with – that decisions are being made by a select few, and that partner meetings are essentially eyewash as major decisions are actually made beforehand.
6. The more influential partners don't seem to be openly communicating with the rest of the attorneys, who are, more and more, often learning about decisions through the “grapevine” rather than from the decision-makers themselves.
7. Senior partners (or the major rainmakers) consider the firm to be their private domain and take others for granted.
8. The influential partners just don't seem that concerned about the feelings of other partners, or their status at the firm.
9. Too many partners feel their own personal and professional needs and priorities are being given short shrift – when, for example, they're handed off client matters at the last minute with the expectation that the work will be performed immediately, or within an unrealistic time frame, even though the matter may have rested on the originating partner's desk for days.
10. The more influential partners are just plain greedy, and are perceived to be manipulating compensation policies to suit their purposes.
11. There is a palpable lack of adequate planning for transferring client responsibility from the more senior partners to midlevel and junior partners.
12. There is a fall-off in business due to a client departure that the firm did not anticipate or plan for, or a significant matter that kept several attorneys and staff fully occupied terminates and there is no plan to replace that work.
13. Senior partners reduce their active involvement in business origination, work performance, or firm management, yet are still expecting to receive a significant portion of profits.
14. A minority of partners make decisions or engage in activities that ignore or disregard the stated concerns, interest, wishes or expectations of the majority.
Action Plan
Managing partners who can detect all or most of these telltale signs have a Herculean task ahead of them, probably beyond the scope of this article to encompass. We can, however, offer a best practices regimen for a likely majority of law firm managers who are reading enough of these warning signs to know that decisive action on their part is both necessary and possible.
1. Lawyer/managers should take particular care to assess the needs, requirements and expectations of all the other lawyers.
2. Lawyers should be given the opportunity to be a part of firm governance, and to be kept informed about any of those issues that will influence the firm's future.
3. On a selective basis, assign administrative responsibilities to younger partners (and associates) that will give them a sense of what law firm management is all about.
4. Have regularly scheduled meetings. Announce the dates and times of these meetings far enough in advance to clear schedules, and hold them regardless of whether the more influential partners are present.
5. Prepare an agenda for these meetings. Ask partners to contribute to the agenda. Circulate the agenda prior to the meeting. Provide background information when and where possible in advance of the meeting.
6. Prepare minutes or summaries of the meeting so that there will be a written record of the issues discussed and decisions reached. Circulate these minutes to the partners for informational purposes.
7. Encourage all partners to speak out on policy, financial and operational issues affecting the firm and its practice components – presently and in the future – without fear of retribution by the dominant influential partners.
8. Reach a consensus of a significant majority of the partners about the kind of culture they want for the firm and develop plans to achieve these goals, with partner responsibility and designated dates for status reporting and implementation.
9. Ensure that the firm has a compensation system that is well conceived and implemented, and that rewards the positive efforts of partners and associates – providing incentive for them to perform services that will enhance the firm in a variety of ways (not just economically).
10. Provide all lawyers with the opportunity to grow – professionally and personally – by attending CLE and in-house training programs on substantive legal matters.
11. Provide opportunities for mid-level and junior partners (and associates) to participate in activities affecting client development and retention.
12. Be sensitive to the needs and concerns of the more senior lawyers while ensuring a compensation system that does not lessen the incentive for younger partners.
13. Be ready to “tweak” elements of the firm's culture, in accordance with the priorities and needs of the partners, as a way to avoid problems down the road.
14. Communicate, communicate, communicate.
A financially and professionally successful law firm does not simply evolve. It needs to be built in an orderly and systematic matter. The values that are important to the firm's partners have to be identified, defined and centrally implemented. Absent lawyer management sensitive to the changing needs of a firm, and the desires and expectations of its partners about the values that guide the firm, you can expect defections – individual or en masse or both – and inevitable life-or-death crises further down the road.
By no means do the economic stability and steady growth of a legal practice ensure harmony in the partner ranks or, for that matter, the contentment of any single lawyer. Managing partners who breathe too easily when reassuring revenue or profit numbers get posted may endanger their firms by ignoring tell-tale signs of disharmony. Law firms have been known to go out of business amid strong financials just as precipitously as when those numbers tumble. Remember
The culture of a firm may be its greatest asset for identifying and pursuing both immediate and long-range objectives. Conversely, even as new clients pour in the door, the culture of a firm may be a minefield if it is bound to 1) outdated traditions (“because we've always done it this way”); 2) management styles that are dysfunctional and inconsistent with the desires and expectations of a majority of the partners, as well as the needs and priorities of the firm; or 3) anachronistic philosophies inherited from senior or departed partners that are dismissive of the marketing and compensation programs required to compete aggressively with other financially successful, proactive law firms.
Ideally, law firm management is sensitive to the changing needs of the institution and constantly attuned to the desires and expectations of the partnership about the core values guiding the firm. Those values manifest themselves in the methods for determining and implementing policies, for compensating its lawyers, and for engaging in strategic and marketing planning to compete effectively in its geographic or other markets.
Signs of Trouble
Many managing partners are living somewhere between a fool's paradise and the edge of despair. They know their firm has problems, and they wonder how many more problems, and possibly internecine ones, may be lurking beneath the surface. We've prepared a kind of diagnostic list for such managers, a small compendium of partner complaints to watch for as symptomatic, not merely of personal discontent, but of broader institutional issues.
1. Partners complain, or politely suggest, that they are not being kept informed of firm matters that involve staffing, termination of attorneys, or other matters that may affect particular partners or their areas of practice.
2. Lawyers feel that they are being “manipulated” by management or by a group of dominating partners.
3. Partners balk at being assigned responsibility for performing certain administrative or substantive tasks without being granted adequate authority to accomplish them.
4. The more influential partners are increasingly unwilling to participate in the decision-making process for the firm.
5. At the same time, rank-and-file partners have the sense that they're just being played with – that decisions are being made by a select few, and that partner meetings are essentially eyewash as major decisions are actually made beforehand.
6. The more influential partners don't seem to be openly communicating with the rest of the attorneys, who are, more and more, often learning about decisions through the “grapevine” rather than from the decision-makers themselves.
7. Senior partners (or the major rainmakers) consider the firm to be their private domain and take others for granted.
8. The influential partners just don't seem that concerned about the feelings of other partners, or their status at the firm.
9. Too many partners feel their own personal and professional needs and priorities are being given short shrift – when, for example, they're handed off client matters at the last minute with the expectation that the work will be performed immediately, or within an unrealistic time frame, even though the matter may have rested on the originating partner's desk for days.
10. The more influential partners are just plain greedy, and are perceived to be manipulating compensation policies to suit their purposes.
11. There is a palpable lack of adequate planning for transferring client responsibility from the more senior partners to midlevel and junior partners.
12. There is a fall-off in business due to a client departure that the firm did not anticipate or plan for, or a significant matter that kept several attorneys and staff fully occupied terminates and there is no plan to replace that work.
13. Senior partners reduce their active involvement in business origination, work performance, or firm management, yet are still expecting to receive a significant portion of profits.
14. A minority of partners make decisions or engage in activities that ignore or disregard the stated concerns, interest, wishes or expectations of the majority.
Action Plan
Managing partners who can detect all or most of these telltale signs have a Herculean task ahead of them, probably beyond the scope of this article to encompass. We can, however, offer a best practices regimen for a likely majority of law firm managers who are reading enough of these warning signs to know that decisive action on their part is both necessary and possible.
1. Lawyer/managers should take particular care to assess the needs, requirements and expectations of all the other lawyers.
2. Lawyers should be given the opportunity to be a part of firm governance, and to be kept informed about any of those issues that will influence the firm's future.
3. On a selective basis, assign administrative responsibilities to younger partners (and associates) that will give them a sense of what law firm management is all about.
4. Have regularly scheduled meetings. Announce the dates and times of these meetings far enough in advance to clear schedules, and hold them regardless of whether the more influential partners are present.
5. Prepare an agenda for these meetings. Ask partners to contribute to the agenda. Circulate the agenda prior to the meeting. Provide background information when and where possible in advance of the meeting.
6. Prepare minutes or summaries of the meeting so that there will be a written record of the issues discussed and decisions reached. Circulate these minutes to the partners for informational purposes.
7. Encourage all partners to speak out on policy, financial and operational issues affecting the firm and its practice components – presently and in the future – without fear of retribution by the dominant influential partners.
8. Reach a consensus of a significant majority of the partners about the kind of culture they want for the firm and develop plans to achieve these goals, with partner responsibility and designated dates for status reporting and implementation.
9. Ensure that the firm has a compensation system that is well conceived and implemented, and that rewards the positive efforts of partners and associates – providing incentive for them to perform services that will enhance the firm in a variety of ways (not just economically).
10. Provide all lawyers with the opportunity to grow – professionally and personally – by attending CLE and in-house training programs on substantive legal matters.
11. Provide opportunities for mid-level and junior partners (and associates) to participate in activities affecting client development and retention.
12. Be sensitive to the needs and concerns of the more senior lawyers while ensuring a compensation system that does not lessen the incentive for younger partners.
13. Be ready to “tweak” elements of the firm's culture, in accordance with the priorities and needs of the partners, as a way to avoid problems down the road.
14. Communicate, communicate, communicate.
A financially and professionally successful law firm does not simply evolve. It needs to be built in an orderly and systematic matter. The values that are important to the firm's partners have to be identified, defined and centrally implemented. Absent lawyer management sensitive to the changing needs of a firm, and the desires and expectations of its partners about the values that guide the firm, you can expect defections – individual or en masse or both – and inevitable life-or-death crises further down the road.
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