The backbone of every law firm is its governance structure. The relationship among partners, the manner in which partners are made and the conditions under which they are removed, the sub-organizations through which the firm operates, and the process through which a firm develops and maintains its intellectual capital, all make up the governance of a law firm. The list of governance areas in which we have consulted is as varied as the law firms we serve, but typical areas we work in include:
- Partnership Standards. As we work around the world, among the most common question we are asked is how a firm can deal with its underproductive partners. We have worked with firms on five continents to resolve this issue in ways that are fair to the firm and the individual partners.
- Compensation. A driving issue in many firms is the fairness of the partner compensation system. We have worked with systems ranging from pure lockstep compensation, in which only seniority governs compensation, to complete meritocracies where partners divide profits through elaborate formulas. We understand that compensation is both reflective and determinate of a firm’s culture and its importance to the firm’s success.
- Practice Group Management. The key to any aspect of law firm management is how initiatives are implemented. The management of a firm, together with the action force on any activity is usually at the level closest to the day-to-day practice of law, typically the practice group. We have worked with firms in designing practice groups, training and coaching practice group leaders, and teaching members to gain the greatest benefit from a practice group.
- Succession Planning. The greatest challenge for many firms is a leadership vacuum when the firm’s current management retires or steps down. Edge International has worked with firms in identifying future leaders and setting up succession plans that assure their training and experience.
- Intellectual Capital. The assets of a firm go far beyond its physical facilities and technology. The experience, know-how and intellect that firms bring to client’s business issues are their greatest points of differentiation and value. We have worked with firms in evaluating and creating the means of maintaining and accessing their knowledge base.
- Profitability. While not a law firm’s only objective, creating a profit through which partners earn their living is the primary purpose of most law firms. Through detailed financial reviews, we are able to identify areas where firms can capitalize on opportunities to increase profitability through a variety of financial strategies.
- ProfitMotive®. A web-based survey designed to measure nine predictive factors of profitability. Click here for details.
- PracticeCoach®. A 27 module videotape program for use in practice group meetings to develop strongly functional groups. The first 7 modules are a detailed indoctrination for practice group leaders on how to perform successfully. The remaining 20 modules allow the leader and the group to jointly learn how to gain maximum benefit from their efforts. Click here for details.
- Despite having competitive salaries and good working conditions, a large firm continually experienced heavy attrition among its mid-level associates. Even though they conducted exit interviews, the firm was unable to determine the reason for the heavy rate of departures. We worked with practice leaders to understand that a large level of non-equity partners and of counsel were siphoning off all of the most challenging work from the mid-level and senior associates. As a result, their only way to acquire the skills and experience they would need to become partners was to change firms.
- A firm with a highly subjective modified lockstep system was experiencing a performance drop among many of its middle-aged lawyers. We worked with the firm to change its compensation system to provide bonus compensation for partners who exceeded the expectations for their seniority step - funded through a compensation hold-back for partners who performed under the expectation for their step.
- The managing partner of a large law firm with 25 offices was stepping down after many years. The firm did not have a succession plan and feared factions would be created over whether the new managing partner came out of the traditional “home office” or from one of the regional offices. We worked with the nominating committee and performed independent interviews of partners throughout the firm in determining that the location of the new managing partner was more an issue for the firm leadership than the partners at large.