Growing A Law Partnership-Associate Development and the Partnership Track

Actually, that concept never was entirely accurate even in the days of rapid expansion throughout the 1980's. Some subjectivity was being used even in the very large East Coast firms where large numbers of associates were added each year to the potential partner ranks.

However, with the advent of the general business recession in the early 1990's, there has been a complete turnaround in the concept of partnership tracking and progression. Newly hired associates are now being told that a) not all associates will in fact ever be offered partnership in the firm; b) the time track has been lengthened to 7-9 years or longer for initial consideration; c) the criteria have been redefined and more sharply focused with less subjectivity; and d) there may now be several levels of partnership including but not limited to equity vs non-equity; junior partner vs senior partner; capital vs non-capital; or other similar distinction.

In addition, with the economic decline at many firms, the associates themselves have begun to rethink their options regarding the partnership track. There has been a general compression between senior associate salaries and the compensation of a junior partner. This has caused the senior associate to seriously consider and weigh carefully the risk/reward ratio before accepting a potential partnership offer. After all, the associate has a salary with possible bonus and related fringe benefits and none of the potential liabilities of partnership, such as malpractice claims; long term lease and bank credit line obligations; and responsibility for firm management and the generation of new clients for the firm.

These considerations bode well for the economic future of the legal profession which has grown "top heavy" with too many partners trying to share in a decreasing profit "pie". Some form of shakeout and restructuring has been long overdue, since the overworked concept of increasing leverage by hiring more and more associates simply is no longer economically feasible. The recent and continuing layoffs of large numbers of associates throughout the country is indicative of the excesses that now must be faced and corrected.

Changes for the 1990's

1. Seniority - consistent high quality of performance over 7-9 years with the firm and contribution to the continuing growth and success of the firm;

2. Production - gross fees recorded, billed and collected including analysis of the effective rate and utilization of time;

3. Effort - total hours worked not only on client chargeable matters but also on other issues including recruitment; management; business development; plus the general flexibility and willingness to work extra hours to handle work load fluctuations;

4. Business Development - volume and quality of effort to expand new client development and to retain/develop current clients;

5. Work Quality - efficiency, diligence, competence and timeliness in handling all assigned work both client chargeable and non-chargeable (management, business development, training, etc.);

6. Personal Relationships - effective practice of the team concept including but not limited to working on client assignments; firm management/committees; sharing of client responsibilities and cross-selling; attending firm social and professional meetings;

7. Firm Management - efficiency and effectiveness in handling management assignments, especially in the supervision and quality control of practice teams;

8. Professional/Community Activities - continuing contributions that enhance the firm's image and reputation in the community by building and maintaining good relations with other lawyers; speaking at CLE programs; publishing; conducting seminars; participating in bar activities; and assuming bar and community leadership positions;

9. In-house Training - time and effort recorded in working with younger associates and paralegals to increase their respective professional skills and abilities;

What Must Be Done

Therefore, firms must establish internal training programs to identify and prepare selected associates for becoming effective partners. It is no longer acceptable to be offered partnership status merely because seniority brings one or more candidates into a "zone of consideration". Certain associates must be identified early in their respective careers as to their potential for partnership consideration.

Written performance evaluations beginning at the end of the third year with the firm must be designed to measure the quantity and quality of each associate's contribution(s) to the firm, both objectively and subjectively. Every associate should receive detailed feedback regarding his progress toward partnership consideration including specific recommendations to be evaluated at subsequent performance reviews. Any associate that is not meeting the criteria and/or responding to the periodic criticism must be told clearly that partnership consideration is not a likely option.

Lateral Hires - Potential Trouble

Every day we read about senior associates and partners moving from firm to firm. Traditional patterns of loyalty seem to have disappeared from the current scene. With the apparent emphasis on individual survival, each firm should give serious thought about any mass hiring of lateral partners whose long term loyalty is certainly subject to question.

Summary

For the associate, management of the firm has a duty and an obligation to accomplish the following minimum steps:

1. Establish an effective recruitment program that ensures a steady supply of qualified candidates for staffing the associate ranks;

2. Develop an internal orientation and training program which will systematically bring each associate through the requisite skills training;

3. Prepare a written policy for considering the addition of lateral hires to augment or supplement the progression of firm associates;

4. Install a written annual performance evaluation system that provides each associate with specific feedback regarding progress toward partnership consideration;

5. Develop and disseminate (to associates) a written policy which spells out the details of partnership criteria; the selection process; the time for initial consideration; the handling of lateral hires; and the partnership offer itself (advantages as well as potential liabilities);