Perhaps second only to your brand and reputation, partners represent your most valuable asset.
While much time is dedicated to recruiting and retaining associates, developing business and streamlining operations, is there an on-going effort to assure that partners are aligned, collaborative, productive and motivated? Does management have a pulse on the partnership and an awareness of issues that need to be addressed?
The competitive nature of the legal sector results in the lateral movement of partners but the loss of valuable partners (sometimes together with their partner/associate groups) is often the result of the lack of awareness of partner issues or simply a lack of management. You only need to read the news in legal media to see examples of such occurrences on an all too frequent basis.
The care and management of partners is not simple because a partnership is based upon mutual respect and trust. Partners are almost never overt about their concerns as they wish to avoid conflict and therefore management takes a laissez-faire approach (after all a “partner is a partner”). Firm management is rarely incisive enough to perceive existential risks.
The solution is to ensure that the key components for a stable, productive and motivated partner group are in place. These are Identity, Integration and Incentives.
Organizational identification represents the degree to which people feel a sense of belonging to the organization, its values and its culture. Such identification and affinity with the culture lead to higher work performance, greater job satisfaction and constructive engagement.
Is it your belief that the partners in your organization identify with your firm and its culture? Ask the following questions.
- Has the firm determined its guiding principles and is the culture well-defined? If not, there is a risk that the firm itself lacks identity and does not have the “glue” to bind the partnership.
- Does the firm’s culture offer a unique or different-in-kind experience? This can be invaluable in stabilizing and strengthening the partnership base.
- Assuming there is a defined mission and culture, is the firm managed in a way that is consistent with that culture? Partners often have strong beliefs in certain values and methods which, if not managed, generate frustration. There is a danger in such instances that the firm is diverting from its mission or its declared way of working.
Partnership requires “sharing”, “trust” and “collaboration”. Partners feel that they are “owners”and want to be aware, involved, see progress and have some responsibility for the health and success ofyour firm.
The greater the level of integration – the ability to work together as a group of partners and be strategically aligned – the greater the synergies and the effectiveness of your firm in taking advantage of opportunities and running efficient and effective practices.
Integration depends upon clear communication and collaboration, shared decision-making and shared responsibility.
Here are some questions to ask in evaluating whether these elements are prevalent and create favorable conditions for integration:
- Right level of communication
Does your firm have the right level of communication with partners to keep them informed while, at the same time, providing them with the opportunity to express their views and provide feedback?
- Trust and mutual respect
Is there a feeling of trust and mutual respect amongst partners and do they feel at ease to engage in discussions without fear of judgment or power inequity?
- Shared goals and collaboration
Do partners have shared goals with processes in place that reinforce collaboration? Are there frequent interactions between individuals in different practice groups, do partners participate in groups or committees for firm management, and is collaboration accounted for in the compensation system?
- Client relationships
Is there a sense that clients belong to the whole firm and not to individual partners and does the structure for client relationship management foster that?
- Decision-making structure
Is there a balance between autonomy and accountability?
Decision-making protocols should allow partners autonomy to take decisions within their spheres of responsibility while simultaneously assuring that they are aligned to the firm’s goals and directives.
Partners should not feel handcuffed by bureaucratic structures that undermine their responsibilities (e.g. over-centralization) nor should they feel prejudiced by a lack of accountability on the part of others. Neither fosters integration.
- Organizational structure and processes
Is there a sufficient support structure to allow partners to focus on their business rather than be overburdened by administrative tasks?
Partners may identify with the firm and feel integrated, but partner satisfaction will also depend on their comfort with their roles and responsibilities, the ability to develop professionally and be appropriately financially rewarded.
- Role and responsibility
Does the allocation of responsibilities to partners consider where they can add the most value to the partnership based not only on their expertise and capabilities but also on their level of interest and enthusiasm?
Is the distribution of responsibilities amongst the partners perceived to be fair and appropriate? Partners may become disgruntled if, for example, longevity within the firm is prioritized over relative capabilities and performance.
- Professional development
Are partners cognizant of the opportunities for development within the partnership, such as the assumption of leadership or specialist roles, and the requirements to realize them? Counseling and mentoring should not stop on election to partnership.
- Financial rewards
Is the partner compensation system (sharing of profits) perceived to fairly recognize the contributions?
Are the levels of partner compensation over the long term perceived to be consistent with the market for similar roles in similar firms?
Partner frustrations may arise when there is not a clear understanding of how profits are shared (i.e. the “black box”) or which attributes of partner performance are recognized.
Dealing with concerns and improving financial incentives do not necessarily translate to a complete overhaul of the system; adjustments in measurement criteria and the process may, in many cases, be sufficient. Management may want to consider:
- the extent to which there is a variable element of compensation based on performance against goals
- how to compensate for disparate profit margins generated by different practice groups
- the inclusion, nature and weight of subjective measurements of performance (typically, non-financial criteria)
- rebalancing the relative importance of client origination, client service and matter management
- building greater confidence in the process (e.g. a representative Compensation Committee, clear communications and formal partner feedback)
It is incumbent upon management to periodically take the “pulse of the partnership” and address partner issues that may not be evident on a daily basis.
The use of independent consultants with a high degree of experience and gravitas may be the most appropriate means to obtain a true “pulse of the partnership” since it allows partners to provide information in a confidential fashion, maintaining anonymity, and avoids the perception that the results are in any way political or biased by management.
I would be pleased to further explore with you the process for obtaining partner input and managing partnership issues (“dotting the I’s”) – see my contact information below.