The year 2016 was the year of things ending.
Hoverboards, the Galaxy Note 7, Yahoo, and Vine. Whether it was business acquisition or spontaneous explosion, last year was not a good one for new technology or old ventures.
And, according to a 2016 Altman Weil Flash Survey, law firms are not faring much better.
Firms are having trouble maintaining billable hours, with half of surveyed firms reporting that their equity partners are not sufficiently busy. Worse yet, 62 percent of surveyed firms report that of non-equity partners are also not sufficiently busy, particularly firms with 250 or more lawyers.
With so little going on in 2016, growth looks unlikely for 2017. Only 53 percent of surveyed firms believe that growth in lawyer headcount was required for firm success, and a vast majority believes that fewer equity partners will be a permanent trend.
In fact, the disappearance of the traditional partnership track is another casualty of an overall (fiscally) depressing year.
Nevertheless, death of the traditional partnership track might mean the birth to a new, more efficient system.
In 2017, consider implementing a few of the following ways to make your partners more productive at your firm:
- Track more than just billable hours and new business. Consider leadership or management responsibilities, as well as mentorship as requirements among your partners.
- Make partnership duties transparent so that struggling partners can become inspired by the work of other more successful ones. And, more successful partners can see which of his or her peers need some extra help. Espouse an environment of mutual assistance, not competition to increase productivity.
- After promoting a new partner, require special partnership training. Don’t send your partners into battle without the proper legal weapons.
- For partners in large law firms whose specific practice may permanently fail, consider their cross-sectional expertise and what other departments may profit from their experience. Encourage partners to have multiple, cross-sectional knowledge and flexible skill sets.
- Retrain, don’t rehire. It may be tempting to make cuts to maintain profits. But, where possible, see where you can retrain current partners to become more productive. It often costs more in the long run to fire employees only to rehire one in the future. Before you layoff partners, find out if they’re willing to work part-time, contingency cases, or under a new title (Of Counsel, for example, with a smaller salary).
This year, consider better communication among, rather than excommunication of equity partners. If productivity is the problem, think about putting partners on sabbatical or asking them to attend training on becoming managers or more efficient workers.
Certainly partnership standards and cutbacks to boost profits at law firms have increased. According to the aforementioned survey, 73 percent of firms reported removing “underperforming” partners and nearly half were already in the process of de-equitizing full partners. In fact, over half of the firms surveyed utilize part-time or contract lawyers.
Instead of downsizing your firm, increasing your firm’s creative management techniques and its communication about new partnership requirements to keep top executives may be just as valuable.
Adapt or downsize? Which New Year’s resolution will your firm follow this year?
Not yet resolute? The Center for Competitive Management (C4CM) is here to help you decide. Attend the live webinar, “How Many Lawyers is Too Many Lawyers? Managing Firm Headcount, Capacity & People Power for Increased Profits,” on Thursday, January 12th, 2017, from 2pm to 3:15pm EDT.