Edge International


Edge International 2024 Survey on the Management of Partner Performance

Edge International 2024 Survey on the Management of Partner Performance


We are delighted to share the results of Edge International’s Managing Partner Performance Survey 2024, conducted by Nick Jarrett-Kerr and Jonathan Middleburgh in May this year. 

In brief summary, what we found is:

The Survey

The survey was carried out in April and May 2024.  100 firms responded.  Around 10% of firms participating have more than 100 partners, 15% between 50 and 100 partners and the majority (75%) have less than 50 partners. 

Over half of participants are relatively evenly spread between the UK and USA, with Australia also well represented (see Table One). 

Edge conducted similar surveys both in 2011 and 2018, but with much smaller sample sizes. 

60% of respondents to this 2024 Survey are the Managing Partners or Chief Executives of the firm, with around 30% equally split amongst other leadership roles in the firm.

Has Underperformance Affected Firms?

Underperformance affects firms’ profitability to a similar extent that it did in Edge’s previous surveys.  The 2011 survey found that the bottom line of 70% of firms had suffered by up to 10%, and by 2018, the proportion of firms thus affected was around 90%.  This 2024 Survey suggests the average effect on profits remains high as can be seen from Table Two, which  shows that over 40% of firms have experienced an adverse effect on profit of more than 5%.  

By contrast, in this survey (for the first time), around a quarter of firms experienced hardly any adverse effect due to underperformance.  Indeed, some firms analyse the issue in a different way.  For example, one firm reported that “We look at profitability per team in any given year and consider and quantify which teams are low or no profit teams and the quantum of that ‘contribution’ against expectations”  

Nearly two-thirds of firms say that they are quite likely or very likely to be forced to take further action in respect of partner underperformance over the next two years. By contrast, a quarter feel that further action is not likely.  These numbers are in stark contrast with the surveys in 2011 and 2018 where nearly all firms felt that further action was likely and only around 5% thought that there would be no need for further action.  As it seems probable that levels of underperformance have remained the same, one possible conclusion is that firms have become better at addressing these proactively.

Written Standards and Processes 

The Survey asks if firms have written standards with which partners are expected to comply. 

60% of firms have these, with the remaining firms having standards but not in a formalised way.  For a limited number of firms (under 10%) the written standards are wholly financial.  40% of firms mix financial and other criteria, while around a quarter rely on a balanced scorecard approach. Only a quarter of firms have a formal performance management system that clearly sets out the process and timetable for dealing with issues of underperformance. It may be speculation, but we conclude that  significantly more firms have some form of performance management process than disclosed but that they do not regard it as a ‘formal’ performance management system of the type envisaged by the relevant survey question.  

The Relative Importance of Performance Criteria

We asked participating firms to assess the relative importance of a number of areas of performance on a scale from extremely important to relatively unimportant and even not considered at all.  Table Three highlights five key criteria and shows the relative level of importance ascribed by participants to each of those criteria.  Table Four highlights some other areas in the same way.   

Financial and Economic Criteria remain, by quite some distance, the most important factors.  Business Development and Originations are then followed by Client Relationship Management in order of importance.  It is then interesting to note that Technical Skill and Expertise is valued slightly higher than Team and People Management, with the rest of the surveyed criteria (Table Four) tailing off after that.  One respondent commented that all factors are important but found it difficult to apply those factors consistently. Another commented on the importance of “supervision, generally being helpful to others in the firm, being prepared to get stuck in”.

Use of metrics and/or performance indicators to measure the meeting of standards or performance issues in relation to partner criteria

Unsurprisingly, financial metrics are the easiest and most often employed in assessing partner performance, although – unusually – 1% of responders claimed never to use financial criteria. Two-thirds of firms use such metrics most of the time.  Table Five illustrates the percentage of firms that use particular metrics and / or performance indicators, indicating by use of colour / shading what percentage of respondents ascribe what level of importance to each metric / performance indicator.

What is clear is that the area of partner assessment and scoring remains a difficult one.  No one size fits all.  One respondent seemed to favour a holistic approach: “We have a very broad range of roles in the firm. We know what good performance looks and feels like. We are also a Parity / Short Lock Step firm in one geographical location so if you are underperforming in any aspect, you are highly visible.”

We also asked whether firms have a traditional annual performance review process or whether there has been any move to a continuous feedback process.  60% of firms still have a traditional annual process or a variant of it, whilst nearly 30% now rely on a continuous feedback process.  One firm commented that continuous feedback has not yet become embedded and so the traditional annual structure continues alongside promoting continuous feedback.  Another firm relied on an annual self-evaluation followed by a meeting with the compensation committee.  Our previous surveys did not ask about continuous feedback but as consultants we have noticed an increasing trend towards continuous feedback over the last few years.   

Dealing with Underperformers

We asked several questions about how firms deal with, manage and support underperformers.  Table Six illustrates the typical ways in which firms support their underperformers.  Three quarters offer some form of coaching and many also offer some type of other assistance.  One firm commented that the firm is extremely equitable so will utilise any means possible.

This question was followed by one asking for the period over which partners would have an opportunity to meet standards or to regenerate their practice. Not surprisingly there was a mixture of responses.  Just over 40% of firms think that 12 to 24 months is about right and only 17% would allow longer than that. A quarter of firms think that the period will vary depending on the compelling nature of the partner’s business plan for revival.  Around 15% think that 6-12 months is a reasonable time frame for a partner to turn it around. 

Not all firms are willing to reveal what percentage of equity partners / members have left the firm over the past 5 years primarily as a result of underperformance issues.  Of the 70 or so firms that answered, half said that none had left and 30% reported  that a small number (up to 5%) had left in such circumstances.  Only 10% of responding firms admitted that as many as one in ten had left in circumstances of underperformance.  The percentage of non-equity partners leaving primarily due to underperformance issues was somewhat higher with more than a half of firms reporting attrition of up to 10% of non-equity partners.  

We next asked the extent to which, within the last five years, firms have altered their constitution or members’ agreement / partnership agreement to facilitate the orderly departure of an underperformer.  Nearly three-quarters of firms have made no change, but around a quarter have.  Only one-fifth of firms now require a 100% majority to achieve expulsion, with around half requiring at least a 75% vote.  One response indicated  that the power to expel “sits within the executive although for a significant equity partner it is possible there would be some broader consultation amongst the board and / or equity group” and another reported that “after a conversation with the Board the partner in question has the right to dispute the expulsion by having a vote of the partnership. However, that has never happened — expelled partners have always agreed that they should leave without further voting.”

In the context of departing partners, we were interested to know how the departure was ultimately effected. Table Seven illustrates this with 60% of respondents reporting voluntary departure as the most common method, with heavy negotiation necessary in a significant percentage of cases.

Lateral Hires

We asked two questions about lateral hires.  

The first question refers specifically to those who joined the firm at least two years ago.  It asks how well on average these laterally hired partners have performed.  43% of firms reported that more than half their lateral hires have largely met expectations, with a further 21% stating that all have met or exceeded expectations. 15% of firms report that more than half of their lateral hires have met more expectations than they have failed; this gives a general satisfaction rate of nearly 89%.  However, a significant minority (23% of firms) report that more than half have failed to meet expectations.  We interpret these responses as showing a slight improvement on our 2018 survey which seemed to show a disappointment rate of 36%.  

The second question asks about attrition rates of lateral hires who joined between two and five years ago.  Table Seven shows that in around 75% of firms most lateral hires have remained with the firm.  These results are broadly in line with our previous surveys, although we are aware that other surveys of the legal profession show higher attrition rates even up to 50% in some cases.

Stress and Wellbeing 

The survey asks what percentage of partners have suffered from severe stress, clinical depression or another significant emotional / mental wellbeing issue that has led to departure from the firm (or long-term sickness) over the last five years.  

Whilst the majority of partners have suffered no such issues, there appears to be a significant percentage of partners that have experienced incidences of stress and mental health issues as Table Nine shows.

Alcohol and Substance Dependency

We asked the extent to which partners have – within the last five years – experienced alcohol or drugs substance dependency or other types of dependency issues.  We also asked if any other addictions (such as gambling) had been encountered.  Table Ten shows a low incidence of alcohol and drugs dependency or substance addiction / other issues.  One respondent stated  that he has observed some cases of “more than social use of alcohol as a coping mechanism” but that he was “hard pushed to say there is anyone dependent that is observable.”

Conflicts between Partners

A quarter of respondents had used external help over the past five years to try to resolve a conflict between partners.  There was a mixture of type of external help / adviser used.  We were told by four firms who did rely on external help that coaching and mentoring and some level of mediation had been used.  One other firm sought mediation in regard to a laterally hired non-equity partner, and the matter had been resolved at that level.  One firm reported that they had used management consultants to lead to agreed behaviour codes, and another responded that they had obtained legal advice.  

Technology to Help Manage Partner Performance 

Firms using technology solutions to help manage partner performance are still in a minority.  Only a quarter of firms are currently using such a solution, with mixed results, as Table Eleven shows.   Only three firms told us which system they are using – the ‘Tabs3 Legal Management Software’ and ‘BigHand Legal Business Intelligence Software’ were the software solutions specially mentioned.  A third respondent stated that their firm “previously used Objective Manager and are considering the next system”.  They currently ”use a Word form via iManage with SurveyMonkey for feedback” but describe this as not ideal.

Nick Jarrett-Kerr

Edge Principal LL.B is a specialist adviser to law firms and professional services firms worldwide on issues of strategy, governance and leadership development as well as all-important business issues facing firms as they compete in difficult market conditions. In the last twelve years, he has established himself as one of the leading UK and international advisers to law firms. He has been involved full-time in professional service firm management for over twenty years.

Jonathan Middleburgh

Edge Principal consults on senior human capital issues and coaches senior legal talent in both law firms and legal departments. A former practicing lawyer who is also trained as an organisational psychologist, Jonathan has a wide range of experience helping law firms and legal departments to develop their senior legal talent so as to maximise business outcomes.