When a Partner Leaves, Advice to the Firm

Perhaps it’s too many episodes of The Good Wife or news of Howrey’s dissolution, but there seems to be a lot of chatter surrounding the departure of partners at law firms. Obviously, this tough economy has made the situation “fight or flight” for firms, where only the toughest survive.

However, as in the case of Howrey, sometimes mass partner departure and total firm collapse could be prevented with enough forethought and preparation. Had Howrey survived, it certainly would have lost a number of key associates and partners, as well as their clients. Certainly, in this case, solicitation rules, non-compete agreements, and war over the client’s business are integral to survive.

But, even when a firm cannot retain its partnership, firms can try and ease the transition with a few pre-emptive steps to keep, in the least, the client list intact.  

1.  Name partners should maintain relationships with every client

When hired, a partner may bring in his or her own client list. However, it is important that the name partner of the firm keep regular contact with those same clients, by paying office visits or scheduling personal meetings with them. This way, if the managing partner leaves, the name partner has the opportunity to reach out to the departing partner’s clients and make a better offer for them to stay. It’s likely that there is a service, practice expertise, or even special billing price that your firm can offer that will entice a client to stick around—if they feel comfortable with the face behind the phone call.  

2.  Be particular about contract terms with clients

In an alternative fee agreement, be sure the loyalty of the client is to the firm and not the equity partner. Decide whether or not you want leeway to renegotiate the contract and have candid discussions with your clients about the various possibilities. Alternative fee agreements (and basically a firm’s promise not to over bill) will be a deciding factor in whether or not a client decides to change firms. Convince a client that the success they’ve appreciated in the past was a collaborative, firm-wide effort, as opposed to the work of one partner. Have names and attorney-client work product to prove it. You’ll find, in the end, money is the most persuasive. So, know your alternative fee agreements and write them as if the leading counsel on the case is about to leave. Make sure your clients know you are flexible.  

3.  Be particular about contract terms with partners

The environment for law firms is competitive. Clients have the competitive advantage of having numerous law firms from which to choose. But, the environment is equally competitive for attorneys, who may need incentives to stay at your firm. So, make the track to partnership accessible to all associates. And, when a new partner is hired or promoted from within, be clear on your terms of performance and loyalty to the firm. This means, discuss and be agreed on how the firm should operate, write a contract that details how compensation will be determined, and be frank in conversations about future plans to stay.

If your partners are well compensated and feel as though their opinions count, they’ll likely not want to leave in the first place, which certainly saves the trouble of protecting your (or their) client list.


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