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In recent years the legal profession has witnessed an increasing number of dissolutions, split-offs, and mergers among law firms everywhere, and the trend does not appear to be diminishing. More often than not, the underlying factors involve the economics of the practice, and chief among the issues being raised by this activity is what do lawyers actually know about the firms' record-keeping, systems, quality of work performance, and financial stability.
Partners should have access to information about their firms, and it is incumbent upon the individuals to request the information. We further assert that law firm management is: 1) obligated to provide this information, and perhaps more important, 2) responsible for overseeing and evaluating current operations and policy, and determining an appropriate course of action to ensure the firm's viability.
One vehicle for accomplishing these tasks (and often recommended in the course of this author's work with client law firms) is the preparation of an annual report document, prepared under the supervision of the managing partner, for all owners. This 'State of the Firm' report provides owners an appraisal of the firm's prior years and planning for the coming period. This report should be distributed to partners at least two to three weeks before a firm's annual meeting or retreat.
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