Becoming a Law Firm Partner

Before they are promoted to partnership, associates and counsel are reluctant to ask the burning questions about what realistically to expect because they fear it would convey the perception that they are not ready for greater responsibility. (Perhaps this will change when Generation “Why?” reaches that level. They ask endless questions.)

Firms spend years ' and large investments in both time and money ' identifying, developing, and selecting new partners. The sooner new and prospective partners, those desirable senior associates whom the firm is really eager to keep, understand financial and interpersonal issues, the sooner they will be performing at the productivity level the firm seeks and expects.

After 'Commencement'

Yet with so little enlightenment offered, even by large, supposedly sophisticated firms, a substantial leap of faith that the right decisions were made is required.

An article “I Wish I Had Known '” in the June 2008 issue of the ABA Journal reports some of the surprises newly minted partners are still experiencing nine years after I began speaking, writing, and advising on this situation. Some firms have taken some useful measures. Typically, though, instead of addressing all, including the nonfinancial changes before the unintended consequences occur, much of what exists is only a Band-Aid.

For example, non-equity partners and even equity partners at several firms said they were not given sufficient information to make an informed decision as to whether to accept the offer of partnership. (They know enough to know it is not all upside.) They don't see the partnership agreement until afterward, they don't know or understand what they will be earning (or paying from their own pocket), they don't have a good sense of the perk package or the governance of the firm, and they feel little increase in their own decision-making authority.

New partners need to be better prepared as to what to expect in four categories:

1. Business development and client service;
2. Firm financial policies and personal ramifications;
3. Organizational factors and conflict within the firm; and
4. Psychological factors and personal time.

Often, the information sharing is pretty informal. Even at most of the firms with formal new partner orientations, there are many gaps in information and understanding, though firms think the transparency is much improved from 10 or 20 years ago. Among the large firms that make a substantial effort are Mayer Brown and Greenberg Traurig, LLP. The former now has a two-day orientation program to which it gathers new partners from all over the world. New non-equity partners are told about conflict searches, billing, and compensation, and are briefed on how to reach equity partnership. Business development training is provided by outside consultants on the second day.

In a more streamlined approach, Jones Day's partnership orientation has featured a half-day of briefings on roles of partners, professional development, and supervisory skills. The agenda changes depending on perceived needs. It seems that more is needed to address the concerns laid out above.

Greenberg Traurig's orientation was originally designed to take place in modules over several months. It was started several years ago by a new shareholder I was coaching, who told me that there had been no information on many aspects of adjusting to and expectations of new shareholders (partners). He developed a series of sessions and agendas to cover what he and some peers thought was important to know early on. That shareholder orientation process was taken over after a few years by the firm's former marketing director who is responsible for integration of lateral hires. These programs have a significant place, especially in firms that experience continuing growth.

After going through the existing formal or informal new partner orientations, many attorneys in the majority of firms still feel the stress of uncertainty as to what to expect.

Sharing Information

Firms can be more transparent and give new and prospective partners the information they need by: holding informational briefings; encouraging them to ask questions; reviewing appropriate information during performance evaluations; and generally fostering an environment of openness. Ideally, the informational briefings should be held in the senior associate years rather than waiting until the new partners have plunged into their new roles with uncertainties and unanswered questions about expectations, but this is unlikely to happen.

The briefings and discussions can be done in a group format. A one-shot, half-day presentation is not sufficient. The briefings may be conducted by members of firm management and specialists within the firm. In many cases, however, management is not comfortable and prepared to deal with the sensitive and complex issues and may find it difficult to be as objective as necessary. In those instances, outside experts in law firm business development, financial matters, organizational development, and conflict resolution can be valuable as educators, coaches, and resolvers of conflict. They should act as a bridge and intermediary between management and the new or prospective partners to clarify and help implement plans and policies. This must be done, or course, with the full cooperation of management and inside specialists in administration, legal personnel, and marketing.

Four Big Issues

Here are some of the specific issues and questions to deal with, custom-tailored, of course, to your particular firm.

What are the significant changes in roles and responsibilities in the transition from associate to partner? Partners must be encouraged to take more business development initiative despite the potent billable hours messages they get. They need to strengthen their client service and relationship building skills and focus. How they handle these responsibilities will have a major impact on career success, long-term security, and financial rewards. They must establish with the firm how they are expected to obtain the skills they need.

As to other firm governance roles, new partners need to get a clear idea of the pluses and minuses to their careers and compensation of taking on other necessary firm responsibilities regarding administrative functions, recruiting, training, and mentoring.

How will compensation and financial responsibilities and rewards change? Most senior associates and brand new equity partners are not prepared for the dramatic shift away from salary and paid benefits to “self-employment“ and tax responsibilities, capital commitments, and cash flow planning. They must learn financial discipline.

What possible sources of tension among partners may arise? With promotion to partnership, associates go from serving as support employees to certain partners ' a member of their team ' to another player among whom the pie must be divided. This often changes the dynamics of relationships significantly, with considerable stress, anger, confusion, and insecurity resulting.

Last, how will partnership affect personal life? The time commitment to the firm increases with administrative, business development, and client management responsibilities.

Succession Planning and Talent Development

Preparing new partners is not a stand-alone process. It needs to be connected to overall talent development and succession planning at all levels of leadership. That is something that most law firms have neglected.

If you think of succession planning as a continual process, you will want to involve the younger generations in the firm. Hold at least periodic meetings, invite them to ask questions, and listen to their input. By tapping into the collective wisdom at all levels, partners will learn a lot about what can make their firms more successful and what are the most important attributes the firm needs to foster. It will help to better prepare new partners for their various roles. By engaging them in this important activity, the organization will be more likely to retain its best talent.

Conclusion

The issues and problems mentioned above occur to a greater or lesser extent at almost all firms with more than 10 lawyers and sometimes in smaller ones. They shouldn't require a leap of faith. As stated earlier, they cannot be dismissed as “touchy-feely” issues that are not worth the time of smart, busy lawyers. They are profitability issues that can be resolved by sharing more information early on and making a serious attempt using the required resources to address tensions that get in the way of hard-working, high-achieving partnerships. A firm's new and prospective partners have been training for their new positions for seven to 10 years. How foolish to fail to train the future owners of the firm in the changes to their financial and interpersonal lives.

What Every Partner Should Know

• How to understand what compensation figures really mean;
• No more “salary” ' understanding cash flow;
• Tax consequences of partnership;
• Capital commitment ' business owners ' responsibilities;
• Changes in roles and responsibilities;
• Business generation expectations and skills; reputation building;
• Client service expectations and skills;
• Administrative and governance responsibilities;
• How partnership may affect personal life and time management; and
• How today's law firm (business) must operate to survive and thrive.

Benefits to the Firm

• Higher productivity for new partners;
• More motivation for business generation because partners will understand rainmaking ' s relationship to compensation;
• Increased loyalty to the firm from feelings of trust;
• Less tension and conflict among partners (which leads to both higher productivity and a more pleasant working environment); and
• More interest in sharpening skills that aid the business of the firm;

How Firms Can Give New Partners the Information
They Need

• Hold informational briefings;
• Encourage new and prospective partners to ask questions;
• Review appropriate information during performance evaluations; and
• Foster an environment of openness.

Interviews with senior associates and individuals in their first or second year of partnership (particularly equity partnership) reveal that they frequently face a number of surprises ' even shocks ' when they enter their new, long-desired status. In most firms, especially in most of the large and mid-sized firms, they are not told by management or the more senior partners what to expect, financially and psychologically, as to monetary and time commitments, stress, and the internal politics they will have to navigate in order to succeed at the firm. Some of the results we've observed are conflicts between new and existing partners, reduced productivity, taking a longer time to fulfill their spectrum of responsibilities, and serious questions about their future satisfaction at the firm.

From the firm's side, whether explicitly acknowledged or not, these are more than soft “human capital” issues. They are hard profitability issues.

Partnership in a law firm, until recent years, was the clear and unquestioned goal of almost all lawyers who entered non-solo private practice. Now life is much more complicated: In-house positions in corporations have become equally or more attractive, and more and more attorneys are questioning the culture and strains of law firm life as the optimum place to spend their most productive years. For the majority of associates and young partners in firms, however, the concept of partnership is still the brass ring. Unfortunately, most are not prepared for the economic and psychological impact.

Before they are promoted to partnership, associates and counsel are reluctant to ask the burning questions about what realistically to expect because they fear it would convey the perception that they are not ready for greater responsibility. (Perhaps this will change when Generation “Why?” reaches that level. They ask endless questions.)

Firms spend years ' and large investments in both time and money ' identifying, developing, and selecting new partners. The sooner new and prospective partners, those desirable senior associates whom the firm is really eager to keep, understand financial and interpersonal issues, the sooner they will be performing at the productivity level the firm seeks and expects.

After 'Commencement'

Yet with so little enlightenment offered, even by large, supposedly sophisticated firms, a substantial leap of faith that the right decisions were made is required.

An article “I Wish I Had Known '” in the June 2008 issue of the ABA Journal reports some of the surprises newly minted partners are still experiencing nine years after I began speaking, writing, and advising on this situation. Some firms have taken some useful measures. Typically, though, instead of addressing all, including the nonfinancial changes before the unintended consequences occur, much of what exists is only a Band-Aid.

For example, non-equity partners and even equity partners at several firms said they were not given sufficient information to make an informed decision as to whether to accept the offer of partnership. (They know enough to know it is not all upside.) They don't see the partnership agreement until afterward, they don't know or understand what they will be earning (or paying from their own pocket), they don't have a good sense of the perk package or the governance of the firm, and they feel little increase in their own decision-making authority.

New partners need to be better prepared as to what to expect in four categories:

1. Business development and client service;
2. Firm financial policies and personal ramifications;
3. Organizational factors and conflict within the firm; and
4. Psychological factors and personal time.

Often, the information sharing is pretty informal. Even at most of the firms with formal new partner orientations, there are many gaps in information and understanding, though firms think the transparency is much improved from 10 or 20 years ago. Among the large firms that make a substantial effort are Mayer Brown and Greenberg Traurig, LLP. The former now has a two-day orientation program to which it gathers new partners from all over the world. New non-equity partners are told about conflict searches, billing, and compensation, and are briefed on how to reach equity partnership. Business development training is provided by outside consultants on the second day.

In a more streamlined approach, Jones Day's partnership orientation has featured a half-day of briefings on roles of partners, professional development, and supervisory skills. The agenda changes depending on perceived needs. It seems that more is needed to address the concerns laid out above.

Greenberg Traurig's orientation was originally designed to take place in modules over several months. It was started several years ago by a new shareholder I was coaching, who told me that there had been no information on many aspects of adjusting to and expectations of new shareholders (partners). He developed a series of sessions and agendas to cover what he and some peers thought was important to know early on. That shareholder orientation process was taken over after a few years by the firm's former marketing director who is responsible for integration of lateral hires. These programs have a significant place, especially in firms that experience continuing growth.

After going through the existing formal or informal new partner orientations, many attorneys in the majority of firms still feel the stress of uncertainty as to what to expect.

Sharing Information

Firms can be more transparent and give new and prospective partners the information they need by: holding informational briefings; encouraging them to ask questions; reviewing appropriate information during performance evaluations; and generally fostering an environment of openness. Ideally, the informational briefings should be held in the senior associate years rather than waiting until the new partners have plunged into their new roles with uncertainties and unanswered questions about expectations, but this is unlikely to happen.

The briefings and discussions can be done in a group format. A one-shot, half-day presentation is not sufficient. The briefings may be conducted by members of firm management and specialists within the firm. In many cases, however, management is not comfortable and prepared to deal with the sensitive and complex issues and may find it difficult to be as objective as necessary. In those instances, outside experts in law firm business development, financial matters, organizational development, and conflict resolution can be valuable as educators, coaches, and resolvers of conflict. They should act as a bridge and intermediary between management and the new or prospective partners to clarify and help implement plans and policies. This must be done, or course, with the full cooperation of management and inside specialists in administration, legal personnel, and marketing.

Four Big Issues

Here are some of the specific issues and questions to deal with, custom-tailored, of course, to your particular firm.

What are the significant changes in roles and responsibilities in the transition from associate to partner? Partners must be encouraged to take more business development initiative despite the potent billable hours messages they get. They need to strengthen their client service and relationship building skills and focus. How they handle these responsibilities will have a major impact on career success, long-term security, and financial rewards. They must establish with the firm how they are expected to obtain the skills they need.

As to other firm governance roles, new partners need to get a clear idea of the pluses and minuses to their careers and compensation of taking on other necessary firm responsibilities regarding administrative functions, recruiting, training, and mentoring.

How will compensation and financial responsibilities and rewards change? Most senior associates and brand new equity partners are not prepared for the dramatic shift away from salary and paid benefits to “self-employment“ and tax responsibilities, capital commitments, and cash flow planning. They must learn financial discipline.

What possible sources of tension among partners may arise? With promotion to partnership, associates go from serving as support employees to certain partners ' a member of their team ' to another player among whom the pie must be divided. This often changes the dynamics of relationships significantly, with considerable stress, anger, confusion, and insecurity resulting.

Last, how will partnership affect personal life? The time commitment to the firm increases with administrative, business development, and client management responsibilities.

Succession Planning and Talent Development

Preparing new partners is not a stand-alone process. It needs to be connected to overall talent development and succession planning at all levels of leadership. That is something that most law firms have neglected.

If you think of succession planning as a continual process, you will want to involve the younger generations in the firm. Hold at least periodic meetings, invite them to ask questions, and listen to their input. By tapping into the collective wisdom at all levels, partners will learn a lot about what can make their firms more successful and what are the most important attributes the firm needs to foster. It will help to better prepare new partners for their various roles. By engaging them in this important activity, the organization will be more likely to retain its best talent.

Conclusion

The issues and problems mentioned above occur to a greater or lesser extent at almost all firms with more than 10 lawyers and sometimes in smaller ones. They shouldn't require a leap of faith. As stated earlier, they cannot be dismissed as “touchy-feely” issues that are not worth the time of smart, busy lawyers. They are profitability issues that can be resolved by sharing more information early on and making a serious attempt using the required resources to address tensions that get in the way of hard-working, high-achieving partnerships. A firm's new and prospective partners have been training for their new positions for seven to 10 years. How foolish to fail to train the future owners of the firm in the changes to their financial and interpersonal lives.

What Every Partner Should Know

• How to understand what compensation figures really mean;
• No more “salary” ' understanding cash flow;
• Tax consequences of partnership;
• Capital commitment ' business owners ' responsibilities;
• Changes in roles and responsibilities;
• Business generation expectations and skills; reputation building;
• Client service expectations and skills;
• Administrative and governance responsibilities;
• How partnership may affect personal life and time management; and
• How today's law firm (business) must operate to survive and thrive.

Benefits to the Firm

• Higher productivity for new partners;
• More motivation for business generation because partners will understand rainmaking ' s relationship to compensation;
• Increased loyalty to the firm from feelings of trust;
• Less tension and conflict among partners (which leads to both higher productivity and a more pleasant working environment); and
• More interest in sharpening skills that aid the business of the firm;

How Firms Can Give New Partners the Information
They Need

• Hold informational briefings;
• Encourage new and prospective partners to ask questions;
• Review appropriate information during performance evaluations; and
• Foster an environment of openness.