In or out?
What to do when a law partner seriously outperforms the rest and makes demands that can't be met.
Even under the best of circumstances, law firm partners are difficult to manage. But what is a firm to do when one partner seriously outperforms the rest and demands to be compensated accordingly?
For more than a few star billers, the notion that one is expected to leave some money on the table is hard to swallow. Indeed, the very nature of partnerships means that some will pull their weight more than others, Michael Short, a principal at LawVision Group, told participants at this year’s CBA Law Firm Leaders Conference in Montreal. “At any given time, you’re going to have a range of contributions. Not everybody bills at the same level. Not everybody collects at the same level,” he said. But a healthy firm still requires a tight range of relative contributions, billable or not, he said. “Everybody has to feel as though they’re pulling at the same level.”
Top billers tend to view themselves as free agents ready to bolt at the first opportunity, which takes its toll on managing partners. Enduring that stress and accommodating a big biller’s every wish can affect the partnership’s culture, internal sense of trust and cohesiveness.
This is all the more true considering that the contributions the firm brings to the star partner are often overlooked.
“When somebody is big biller they usually utilize a lot of firm resources to become that big biller,” said Dr. Larry Richard, the principal consultant at LawyerBrain, who has spent years studying the psychology of lawyers. “And they often, in my experience, don’t acknowledge that. They see their result — earning a lot of money [for the firm]. But they don’t see the cost of earning that money, and that those costs extend to people and other kinds of resources that the firm has accorded them.”
It is why in many cases it is probably best to resist caving into demands by star billers for 100 cents on every dollar he or she brings to the mill. “If it has come to this, chances are you have no options,” says Gary Luftspring, the managing partner at Ricketts, Harris LLP in Toronto.
At times like these, he says, it’s often best to conclude that irreconcilable differences are inevitable and that the partnership model in place cannot be bent out of shape to accommodate one individual. “You may have to say, ‘you’re in or you’re out.”
Because the risk, according to Luftspring, is that special treatment will end in tears anyway. It can foster resentment among the other partners who might even be tempted to undermine the star.
It may seem counterintuitive, but a star biller striking out on his own or crossing the street is not always the worst outcome. “Most of the time my advice is to let the person go, even if the cost economically can be huge,” Dr. Richard told conference attendees. “In every case that I can recall, when that has happened, the aftermath has been much more favorable to the firm than had been feared. Morale improves significantly; profitability improves much more than they expected it to; the number of associates that that partner has taken with them is less than predicted. Everything turns out to be better for the firm when they make that hard decision. There’s a sigh of relief that people have.”
None of which is to say that the star biller is always the problem. The implicit presumption here is that he or she is a relentless overachiever. But a scenario in which the partnership is accommodating too many underachievers can be just as toxic. According to Short, sometimes what the dominant partner is trying to say to his partners, is “You all have to work harder. He’s trying to convey a message: “I see a whole lot of people standing on my coattails and I’m dragging you around.”
Short says this is a red flag for law firm cohesiveness: “You start stretching the glue that binds law partners together… It’s time to start looking at how all the pieces fit together.”
Luftspring offered a similar cautionary note about having too many underachievers on board. “Overachievers want to be in an overachieving culture in an overachieving firm.”
Ultimately, the long-term survival of any law firm is rooted in its values, said Richard. “Whatever you as a leader do, people are watching you. This is not just about this big billing partner. It’s about the firm values. And you don’t want this particular individual basically hijacking that culture and saying, ‘I want to have things my way.’”