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Financial stability within a law firm practice does not guarantee harmony within the partnership itself. Far from it. Witness the constant present. And law firm management that does not acknowledge or reflect the contributions and needs of its members endangers the firm’s cohesiveness, and even its very existence, no matter how many clients come through the front door. Eddy Beckett & Moore (a hypothetical firm) is at a crossroads. It is no longer the firm that was founded 18 years ago by three partners – Mark, Dean and Randy – who left a larger firm because of the dissatisfaction with a big-firm setting. Today their own firm is run by a management committee comprised of the three senior (and founding) partners. The committee determines policy, makes major decisions affecting the firm, and sets partner compensation. Partner meetings are held monthly. Agenda and summaries of financial reports are distributed to partners at the meetings. During the last three years, the firm has acquired two smaller firms. Although these acquisitions have been successful from an economic standpoint, the acquired partners and a few of the firm’s midlevel and junior partners have begun grumbling about the firm’s governance. Although the firm’s overall client base would appear to be solid, more active plans must be put in place for a smoother transition when some of the older partners step down by dint of age, health, etc. The younger partners do not share the older partners’ degree of loyalty to some of the firm’s longstanding clients. This is not unreasonable from the younger firm members’ point of view: They have not necessarily received the benefits of these long-term relationships, and more to the point, have not been invited to participate in their cultivation. Mark Eddy is the senior managing partner and member of the executive committee. His contacts and reputation have been the firm’s mainstay since its inception. Dean Beckett is the second member of the executive committee. His ancestors’ good works have kept many doors open to the firm. Randy Moore is the third member of the committee. He sits on a lot of boards, and has toyed with the idea of running for political office in the city. Fred has been a partner for two years. Sam will be a partner by the end of the year. There are many other such Freds and Sams at the firm. Imagine the following exchange takes place between Mark Eddy and Dean Beckett late on morning in Mark’s office: “Dean, have you seen Fred?” “He was around earlier. Check with his secretary. Say, are we hiring that real estate guy?” “I won’t be there, but Randy will announce it at tomorrow’s firm meeting. We’ll also probably want to see that labor specialist for a final wrap-up. There will be some shifting around down there once he’s aboard, but that area is flexible. Eileen, tell Fred I’m ready for those contracts.” “I’m sorry, Mr. Eddy, Fred is at a director’s meeting this afternoon.” “Did they ask for him?” “I didn’t take the call.” “Sam, this is Mark Eddy. Could we get together about some contracts I need for a meeting in the morning?” While this exchange is taking place, junior partner Fred is on the road, cultivating his own patch. Given the present state of affairs at the firm, he feels justified in setting his own strategy for success. While the client he is seeing is not yet the firm’s largest, it will be after Fred meets with the company’s directors this afternoon. Then, at tomorrow’s firm meeting, he will make his own announcement. Also at the meeting, the management committee will announce the particulars concerning a retreat scheduled for later in the month. The attorneys have completed a questionnaire concerning the way things are done at the firm. Partners and associates have enumerated their growing dissatisfaction with firm management and policy, as follows: Not being kept informed of firm activities that involve staffing or termination of attorneys, including matters that may affect particular partners or their areas of practice, lateral hires, etc. For example, although Fred is on the recruitment committee, he did not feel his viewpoint was considered when the final decision was made to hire the real estate candidate. Also, the lawyers in the labor area are not yet aware that they will be required to shift ranks when the new hire comes in. Being assigned responsibility for performing certain administrative or professional tasks without being granted adequate authority to accomplish the objectives. Again, Fred had tried to develop the real estate area, but didn’t have the clout to garner support for his ideas and strategies. Decisions are made by a select few, and the partner meetings are essentially eyewash. Major decisions are made prior to partnership meetings, and the partners feel they are being “managed” or “manipulated” by a senior partner or a committee of dominant partners. Unwillingness on the part of the senior partners to share the decision-making process for the firm, and lack of open communication between the more influential partners and the rest of the firm. While the firm’s founders discuss firm business among themselves, the rest of the practice hears things via the ubiquitous grapevine. Senior partners consider the firm their private domain and take others for granted. Younger attorneys resent the habit of some influential partners of embarrassing other partners or associates before clients. Insensitivity by senior partners to the personal and professional needs of other partners, i.e., handing them projects at the last minute and demanding that the work be performed, immediately, even though the matters may have rested on the originating partner’s desk for some time. An unfair compensation system, whereby the more influential partners are greedy and manipulate compensation plans to suit their own purposes. While it was not necessarily intended to operate this way, for all intents and purposes the executive committee is also the compensation committee. The lack of adequate planning for transfer of client responsibility from the more senior partners to midlevel partners. The younger partners are seeing a fall-off in business due to client departure not anticipated or planned for by the firm. As far as these partners can tell, no plans exist for replacement of that work. The more senior partners have reduced their active involvement in producing work, originating business or managing the firm, but still expect to receive a significant portion of profits. There is a lot of speculation among the firm’s attorneys over whether this is reflected in the year-end distributions. The unwillingness of the firm’s founders to bring in outside consultants, who might be able to provide objective recommendations on future firm governance and other sensitive issues. General opinion is that management fears losing control. While agreeing to use a law firm consultant for the upcoming retreat, management has expressed grave reservations about “stirring the tempest” and creating more serious problems. If this firm is to cultivate the allegiance of its attorneys, it must allow them to participate in their own destiny. One case in point is Fred’s effort on his own behalf. Both the firm and Fred know he is a superstar. Once Fred gains a vantage point, the firm will have to listen to him. While the final results will conceivably benefit both Fred and the firm, the process of building an alliance would be better served by a few critical differences in the firm’ relationship with Fred and with all of its attorneys. Although this hypothetical firm has been successful and aggressive enough to attract able and talented young partners, it has neglected to provide the means for its attorneys to marshal their abilities to a unified end. The firm must take stock of itself: Determine what it is, what kind of firm it wants to be, and then proceed to make that entity palatable to all its members. Management must take particular care to assess the needs and requirements of all its lawyers, and give them the opportunity to use their skills and abilities to their own and the firm’s advantage. The main point that management must recognize is that the firm’s lawyers need to participate in the activities and decisions that determine their future, from the beginning of their relationship with the firm. Firm management must make an active commitment to instilling its attorneys with the view that they do have an important stake in the firm’s future. The firm can begin to build unity and cohesiveness by incorporating the following items into its organization: Assign responsibility for client matters at an early stage in the attorney’s career. Introduce the attorneys to clients as early as is practical. This will enable the attorneys to step into the fray from the beginning and be more involved and informed on client matters. Establish an ongoing, organized training program for professional growth. This can be done by setting aside time for attorneys to attend CLE seminars or meetings sponsored by other professional groups. Regularly scheduled in-house training sessions would develop the skills required to succeed in various practice areas, including business development and management techniques. Give the attorneys an opportunity to train and supervise other attorneys and paralegals to provide support on specific client projects or in the substantive areas in which the attorneys are involved. Besides serving immediate needs, this specialized team can be useful in developing additional future business. As a side benefit, all of its members will be able to feel like players in the firm’s future. Assist the attorneys in building their individual reputations through participation in programs sponsored by the bar association or by writing articles on substantive areas of practice for publication in bar association or professional journals. Encourage their participation in programs sponsored by the firm and other associations. Develop a formal evaluation program that will let the attorneys know where they stand and allow the qualified associate to progress to partner status. Encourage active participation in the time-honored tradition of pro bono activities, especially ones in which the attorneys have a particular skill or interest. Provide an ongoing forum for the attorneys to participate in discussions with one another concerning client matters. Circulate an agenda before the meetings and make certain all partners and associates are included. Invite active participation and input from all attorneys concerning matters of firm governance. For example, revitalize the executive committee by rotating its membership and limiting tenure and consecutive terms; or establish a compensation committee that represents attorneys from all levels of the partnership. Give the attorneys a voice in policy determination and other important administrative decisions and issues regarding office assignments, benefit programs, automation, space planning, etc. Prepare a strategic plan that enables both partners and associates to participate in determining the firm’s immediate and long-term objectives. For example, let the attorneys participate in matters that involve the firm’s incurring substantial debts or changes in its capital structure. Show care and concern for the professional and personal welfare of partners and associates, acknowledging that client and firm pressures and workloads can contribute to stress and burnout. Encourage the dissenting view, particularly on important issues. A willingness to listen to the other side is an important habit. Set up a compensation system that attempts to be fair and consistent in rewarding all of the lawyers for their total contribution to the firm. Develop an incentive system whereby attorneys get credit for client origination, including enhancement of present client relationships, management of the firm and its practice areas, training of associates and paralegals, pro bono activities and other nonbillable activities. Provide attorneys with appropriate facilities and a high quality administrative support staff that enables them to produce results in a timely and professional manner. Management’s dilemma is in finding a way to successfully corral highly intelligent, egocentric, frequently contentious and functionally independent lawyers so that they are motivated to achieve. Whatever approach is enlisted must be subtle. Any deliberate attempt will be perceived as heavy-handed and contrived and will, therefore, be counterproductive. The “motivator” will most certainly encounter resistance and the effort will fail. JOEL A. ROSE is a certified management consultant and president of Joel A. Rose & Associates, Cherry Hill, N.J., which consults to the legal profession. He can be reached via e-mail at [email protected].

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