April 20, 2021
Which Law Firm Partners Should Stay and Which Should Go?
We frequently address how law firms can use partnership agreements to disincentivize partners from departing the firm. Protecting the firm through the partnership agreement is an important way for law firms to manage the risks of partner departures. The partnership agreement is also among several tools the firm can and should employ to address the potential for partner departures. But the best risk management approach for partner departures is to prevent the right partners from wanting to leave the firm in the first place. For the others, well, they should go.
Not Everyone Stays, or Should. Start with the obvious proposition that not every law firm partner will be happy or productive at your firm, or perhaps at any other firm, and for that reason, some can’t be convinced to stay under any circumstances. Even in perfect conditions, which is a description that doesn’t frequently get applied to law firms, people leave. Personal reasons. Professional reasons. Both. Neither. Whatever the cause, the challenge for law firm risk management is not to get every partner to stay. The challenge is to get the right partners to stay and the right partners to go.
Breaking Up Is Hard to Do. In a highly functional marketplace for legal talent, in theory, partners who have free mobility will move until they reach a law firm that employs their talents in the most efficient way, leading to happiness and profits for all. In practice, law firm life is not quite like that. There are intangible negative side effects of partner departures that create some stickiness that can keep partners at firms well beyond the time when it would be best for all if they moved on.
First, partner departures can create the appearance of instability for the partner. If you are frequently leaving law firms for greener pastures, sooner or later, your clients may start to wonder if the problem isn’t the firm, but you. Second, partner departures can create the appearance of instability for the firm. Even if any particular departure is the right thing for the partner and for the firm, other firm partners and employees, as well as firm clients, can conclude that the departure is a sign that the firm is in turmoil, or worse, that the firm is in trouble.
Third, partner departures can be a significant distraction for the firm, at best, or an expensive actual dispute for the firm, at worst. All that time spent on the transition issues is not very productive for the firm. If the departure becomes a dispute, those are not productive hours either, to say the least, and the risks abound. Finally, despite abundant evidence to the contrary, in practical experience, a partner leaving a law firm still, in some ways, goes against what many lawyers think about law firm life. It may be changing, and that change may be accelerating, but to a surprising extent, even today, law firm culture is still extremely staid. The typical lawyer personality isn’t prone to risk-taking and change, especially with regard to their work surroundings.
Surprise, It’s Not Surprising. So, it’s no surprise that many partners stay at law firms far beyond their sell-by date, way beyond when they, their clients, and their firm would be better off if they left for different firms, different work arrangements, and perhaps even a nicer life elsewhere. Which partners should go?
Unhappy Partners. At some firms, you could search the halls with a lantern looking for the last happy partner and search in vain. (Well, in the days when lawyers were all still in the office.) But law firm partners are critical thinkers, to put it mildly, and this generally means that they don’t always present as, well, happy. But there is a difference between partners who are really unhappy at the firm and with the firm, and the rest of the cranky lawyers. The truly unhappy lawyers can be toxic, and contagious, making others at the firm miserable too.
Unproductive Partners. It should go without saying that the law firm would be better off if unproductive partners leave the firm, since that is the definition of better off, providing that the firm properly defines what it means to be a productive partner. That definition will depend on the firm, and it’s not just about financial productivity. In the simplest formulation, it’s about whether the partner brings more to the firm than the partner takes out of the firm. That may mean, and often does mean, money. But it also could mean raw intelligence, intellectual flexibility, problem-solving skills, or wisdom. It also could mean management skill, administrative acumen, or business perspective. It may mean that they are just well-liked at the firm and contribute to the firm’s positive culture. Firms should not narrowly define what it means to be a productive partner. But, to be blunt, it does no good for the firm or for the partners to let unproductive partners stay.
Problem Partners. Problem partners are unhappy partners who have gone viral with unreasonable demands, bad work habits, abusive temperaments, worse, or all of the above. On the other hand, problem partners can be canaries in the coal mine, and just because people are complaining and disenchanted with certain things at the firm doesn’t mean, in and of itself, that they are wrong.
It sounds pretty basic to say that unhappy, unproductive, and problem partners should leave the firm. But just because it seems obvious doesn’t mean that firms actually do it, or even systematically analyze these issues in this way. And the traits are not always consistent: what if someone is really well-liked, but not very productive? Or abusive to colleagues, but very productive? The takeaway from this exercise is that well-run firms develop and use a system to identify partners who should stay and those who should go and to make those changes. That’s the best way — really the only effective way — to manage a law firm’s culture and to help keep the right partners from leaving.
Dena M. Roche
O’Rielly & Roche LLP