Law Practice Management Asked and Answered Blog

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Nov 11, 2026

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Law Firm Back Office Operations Improvement with AI – How and Where to Begin

Question: 

I am the managing partner in a twelve-lawyer estate litigation law firm in Chicago. I believe that our firm needs to be doing much more with AI implementation in our firm. We are using AI for legal research, litigation support, and general case related support activities. However, we have not implemented AI at all in general administrative and accounting operations which are areas where we have five staff employees handling a variety of tasks. I believe that we are inefficient and over staffed. I am having a tough time finding where to start so we can get a handle on this issue. Please provide any information that you are willing to share.

Response: 

Before you can successfully implement AI and related tools to improve administrative and accounting operations and related processes you need to review and understand existing work distribution and workflow and identify and fix any work distribution and workflow issues. I would start with a work distribution analysis and workflow study.

There are questions that you must ask yourself in order to analyze the work distribution of your intake and accounting operations. Such questions as the following will help you in knowing what to look for:

1. What activities (operations and tasks) are being performed?
2. What activities take the most time?
3. Is there any misdirected effort?
4. Are skills being used properly?
5. Are you staff doing too many unrelated tasks?
6. Are tasks spread too thinly?
7. Is work distributed evenly?
8. Are the right people performing the tasks? (Right people of the bus and in the right seats)

Before you can analyze your client intake and accounting operations you must be able to see clearly, in one place, all the activities of your client intake and accounting operations and the contribution of each employee on each activity. A work distribution chart is the easiest and best way to arrange these facts in simple form. A properly made work distribution chart will help you determine if the largest time of your staff is devoted to the major function of each operation. Setup a work distribution chart (spreadsheet) with operations and tasks listed down the left rows and staff names listed across the columns with time listed for each operation and task. It may indicate that more time is being devoted to other functions than is necessary. An operation or task may require a more detailed study, as might be indicated where total hours seem unreasonable. You may discover that your client intake and accounting operations staff are spending too much time on relatively unimportant or unnecessary work. Misdirected effort appears on the work distribution chart when staff are involved in tasks not contribution directly to the mission of the client intake or accounting operations.

Here is an overview of the work distribution analysis process:

1. Have each staff member prepare a task list.
   1. List specific and clear activities for a specific time period with time listed for each activity.
   2. Task lists should cover a complete cycle of work. (Weekly, Monthly, etc.)
2. Determine operations performed.
   1. Prepare an operations list grouping related or same kind of tasks (operations).
   2. Check operations list against breakdown of client intake and accounting operation mission.
3. Complete the work distribution chart.
   1. Complete heading.
   2. List operations.
   3. Enter staff names in a column of the chart.
   4. Enter tasks, time, and work count for each operation.
   5. Total the columns and rows.
4. Examine the present work distribution.
   1. What operations take the most time?
   2. Are they essential?
   3. Is there misdirected effort?
   4. Are skills used properly?
   5. Are you staff doing too many unrelated tasks?
   6. Are tasks spread too thinly?
   7. Is work distributed equitably?
   8. Is the department overstaffed?
   9. Are the right people on the bus?
5. Improve work distribution.
   1. Consider eliminations, additions, and rearrangement of tasks and operations.
   2. Prepare a proposed work distribution chart.
   3. Discuss proposed changes with your partners.
   4. Put proposed changes into effect.

One you have completed the work distribution analysis, prepare a work flow analysis using a drawing tool such as Microsoft Visio or other suitable drawing tool.

Once you have fixed any issues that become evident from your study they you can identify candidate areas for workflow automation and possible AI adoption. Start with reviewing work flow capabilities in your existing practice management software and any recent AI capabilities that have been implemented in your software or are planned for the future.

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John W. Olmstead, MBA, Ph.D., CMC

Nov 04, 2026

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Law Firm Succession Planning – Selling a Solo Estate Planning Practice

Question:

I am a solo attorney in Bloomington, Illinois and have been practicing for 40 years. My practice handles estate planning and estate administration. I have one secretary who is also planning on retiring when I do.  I want to retire at the end of next year and sell or merge my practice. What are the chances of success and what can I expect to be able to receive for my practice? I generate $200,000 a year in fee revenue and net $100,000 in total earnings for myself. My clients mostly come from personal and professional referral sources. A few come from the internet. Please share any thoughts that you have regarding my future transition.

A major strategic concern that law firms – large and small – are having is the need for talented lawyers with experience and I am finding this to be especially the case in small estate planning practices across the country. Talented and experienced lawyers has become even more important than new clients.

Oct 28, 2026

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Law Firm Future Strategy – AI’s Impact Upon Estate Planning Practices

Question:

I am the founding partner and sole owner in our firm located in Miami, Florida. We have a total of four lawyers, four paralegals, and four support staff in our firm.  We are an estate planning firm that handles estate planning, estate administration, and elder law matters for our clients. Estate planning matters are charged a flat fee and estate administration are billed based on time spent on the matter. At a recent attorney meeting the subject of AI and the impact upon estate planning came up and our discussion led us to the question as to the impact that AI will have upon future estate planning work for our practice. Will estate planning dry up with clients using AI tools and doing their own estate planning documents? Your comments and thoughts are most welcomed.

Response: 

I believe that AI will have an impact upon estate planning, especially for wills and trusts in that it will change how wills and trusts are drafted. You will be forced to use AI assisted drafting tools if you are not using them already and the use of these tools will substantially reduce drafting time. More firms will be forced to move from hourly billing to flat fee billing for estate planning work. As efficiency improves and firms that are presently charging flat fees will see competitors charging less, reducing average revenue per matter and required a larger volume of client business to remain competitive. AI will impact how:

1. Estate planning documents are prepared.
2. Client relationships are managed.
3. Legal research is conducted.
4. Estate planning firms price their services.
5. Estate planning firms compete for business.

In order to remain competitive and profitable in the next three to five years estate planning law firms are going to have to:

1. Implement AI in areas that will make routine estate planning work faster and less expensive.
2. Develop separate client intake approaches for mom and pop (lower net worth) clients and higher net worth clients. Consider maximum use of AI for lower net worth clients.
3. Increase the overall volume of estate planning work and charge less, especially mom and pop (lower net worth) work.
4. Increase the firm’s estate planning expertise and sophistication and obtain more higher end net worth clientele.
5. Increase the firm’s higher net worth new client business obtained through professional referral sources such as attorneys, CPAs, financial planners, bank trust departments. Build and enhance relationships in these areas to increase referrals of high-net-worth clients. Build relationships with geriatric care managers, health care professionals, and senior living communities. This can develop into a continuing advisory practice rather than a one-shot estate planning document preparation. 
6. Consider other practice areas that related to your practice that are relationship driven and allow the attorney to serve more as a trust advisor to clients rather than an information provider. Your specific goal should be to shift the emphasis of your practice on interpretation, judgment, and the client’s broader objectives. You might want to consider:
   1. Higher net worth estate planning.
   2. Special needs planning.
   3. Estate litigation.
   4. Life care planning.

Your goal should be to graduate from lawyer technician to a trusted advisor to your clients. A trusted advisor is a lawyer or other professional service provider whom a client relies on not merely for knowledge or technical expertise, but for sound judgment, honest counsel, and guidance in making important decisions. Trust is earned over time through competence, integrity, discretion, consistency, and a genuine commitment to the client’s interests.

As a trusted advisor estate planning attorney your primary role should be to understand the family’s complete circumstances, identify the questions the client has not considered, and develop a coordinated plan that reflects the client’s wishes. Your role should not be to primarily prepare estate planning documents. Your role should be to help clients make decisions about family, responsibility, control, and legacy. This is the difference between a technician whose work will be replaced by AI and a trusted advisor whose work will be focused on client relationships. 

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Oct 21, 2026

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Law Firm End of Year Partner Compensation – Determining Subjective Contributions

Question:

I am the founding and senior partner in our firm which is located in Tucson, Arizona. We have a total of ten lawyers in the firm, six of which are equity partners including myself, two are non-equity partners, and two are associates. We are a real estate and business boutique litigation firm.  I determine compensation for all the attorneys and staff in the firm. For partners I use a combination of working attorney fee collections and client fee originations and make a subjective determination regarding the other contributions a partner has made to the firm. I would like a better way of evaluating these contributions.  I would appreciate any ideas that you might have.

Response: 

Your problem is a problem faced by all law firms with which I have worked. While it is not hard to measure working attorney, responsible attorney, and originating attorney fee collections, billable hours, realization rates, and other hard measures of short-term financial performance, it is hard to capture the subtler aspects of partners’ contributions such as mentoring new lawyers, firm management, idea development and its virtually impossible to measure the long-term present value of each partner’s work and contribution.

The key is to make the subjective considerations more measurable. Many firms are supplementing the easily measured economic contributions per partner with additional measurements to determine the actual value per partner and incorporating them into their compensation systems. Some firms:

• Measure client retention and solicit feedback from present and former clients.
• Measure client satisfaction scores obtained from end of matter surveys.
• Require annual business plans from each partner to be approved by the managing partner or compensation committee with specific measurable goals for the upcoming year.
• Conduct partner peer reviews via online questionnaires.
• Conduct annual partner performance reviews.

Many firms often avoid partner performance reviews. They are time consuming and it is hard to give candid feedback to colleagues. However, without partner performance reviews neither the partners nor the firm will reach full potential. When partner performance reviews are used not only to review performance but to set measurable goals this data can be incorporated into the compensation system and provide additional hard data for providing a true measure of partner contribution and value.

Regarding your non-equity partners, below is a list of the factors that are considered in most firms when allocating salary increases and bonuses to the non-equity partners:

• Contributions to firm profitability (their own billing, leverage, rates, collections, origination, synergies).
• Billable hours.
• Billing and Collection Realization.
• Origination of new business.
• Generation of business from existing clients.
• Enhancing the image of the firm and themselves.
• Contributions toward a positive and collegial firm culture.
• Leadership and attorney mentoring.
• Community activities; and
• Professional development and accomplishments.

A goal should be for equity partners to earn 25 to 30 percent or more profit margin on work provided to the non-equity partners.

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Oct 14, 2026

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AI Is Changing Law Firms—Is Your Management Strategy Keeping Up?

Oct 07, 2026

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Non-Equity Partnership in Law Firms – Issues to Consider & Implementation Suggestions

Question:

I am the managing partner of a small boutique litigation firm in Southern, California. There are two equity partners in the firm and five associates. Two of our associates have been with us for 8 and 15 years respectively and are critical to the success of our practice. We do not want to lose them, so we are considering making them non-equity partners and giving them the title of partner. We are not ready for equity partners at this time. All associates in the firm are paid a salary and a discretionary bonus. How can we make their promotion to partner meaningful and successful?

Response: 

Promoting your first associate to a non-equity partner is a significant step and should not be taken without giving it serious thought and it’s long term implications for the firm in terms of overall career advancement for not just your present two associates but also other associates in the firm as well as others that may join the firm in the future.

Non-equity-partnership should be one step in an overall attorney career advancement program (partner track) that recognizes leadership and professional accomplishment while creating expectations for increased responsibility, client development, and firm management. Your attorney career advancement program should be consistent and fair.

Several of my clients are developing career advancement programs that incorporate a competency-based approach that  outlines specifically what is takes to be successful and advance from associate to non-equity partner and from non-equity partner to equity partner. Rather than leaving the formula for success in the minds of the equity partners, a competency model gives each attorney in the firm an understanding of how he or she will need to perform in order to be perceived as progressing, and ultimately, as successful. Competency models offer transparency and clarity. The model outlines specific behavioral observations as the primary source of performance information. Benefits are as follows:

Associates are presented with clear information on expectations for their level of experience and a road map of what is expected as they progress. Specific expectations are laid out for progression to non-equity partner as opposed to a specific timeline.

Non-equity partners are presented with clear information on expectations for their level of experience and a road map of what is expected as they progress. Specific expectations are laid out for progression to equity-partner as opposed to a specific timeline.

Equity partners and senior lawyers benefit from a consistent description of performance standards that allow them to access performance, assign work effectively, and offer more meaningful career guidance.

The firm has a consistent methodology for making compensation decisions.

Concerning Non-Equity Partnership, the Firm Should Consider the Following:

Give Some Thought and Define Why the Firm Will Have Non-Equity Partners

The firm should clearly define the purpose of the non-equity partner role. Consider questions such as:

• Is it primarily a recognition of legal excellence?
• Is it a transition stage before equity partnership?
• Is it intended as a permanent career position?
• Does it help recruit and retain top talent?
• Does it provide leverage for client succession?

Develop Performance Criteria and Incorporate in Your Attorney Career Advancement Program (Partner Track)

Associates should understand the firm’s expectations before they are eligible for consideration.

Typical criteria might include:

• Years of practice required for consideration
• Consistently high-quality legal work
• Strong client service
• Positive evaluations
• Integrity and professionalism
• Demonstrated leadership
• Business development efforts
• Contribution to firm culture
• Mentoring junior lawyers
• Financial performance and productivity

Evaluate Associate Performance

Promotion should reflect more time worked at the firm.

You should consider whether the associate:

• Handles sophisticated matters independently.
• Exercises sound judgment.
• Is trusted by clients.
• Receives work from partners without significant supervision.
• Is recognized as a subject-matter resource.
• Produces consistently excellent work product.

Consider Whether the Associate Develops or Has the Ability to Develop and Bring in Business.

Consider Leadership Contributions

Partnership involves leadership beyond practicing law.

Are associates involved in:

• Mentoring associates
• Training lawyers
• Managing matters efficiently
• Committee participation
• Recruiting lawyers and staff
• Staff management

Review Financial Performance

Relevant performance criteria:

• Billable hours
• Billing and Collection Realization
• Effective Rates
• Collections
• Profitability of matters

Client Satisfaction 

• Internal Client Satisfaction Surveys
• Google Reviews

Determine Role in Firm Management

• Can non-equity partners vote?
• Can they serve on committees?
• Can they supervise associates?
• Can they sign engagement letters?
• Are they eligible for management positions?
• Are they included in strategic planning?

Consider Developing Non-Equity Partner Compensation System

The firm should consider a different compensation system for non-equity partners. Approaches might consider the following:

• Fixed salary
• Salary plus performance bonus
• Formula-based compensation
• Delegation bonus to based on matter responsibility collections in addition to working attorney collections.
• Merit-based annual adjustments
• Incentives tied to business development
• Leadership bonuses

Consider Additional Perks 

• Consider providing them with additional perks.
• Additional life insurance.
• Country or other club membership.
• Firm paid automobile.
• Gas card.
• Firm credit card.

Conduct a Comprehensive Performance Review

An effective evaluation typically includes:

• Practice group leader assessment
• Managing partner evaluation
• Peer input
• Client feedback (where appropriate)
• Financial analysis
• Review of leadership contributions
• Partnership committee recommendation
• Final partner vote

A structured process promotes fairness and consistency.

Announce Non-Equity Partner Promotions Internally and Externally

• Issue press releases announcing their promotion to partner to the local media.
• Mail out announcements announcing their promotion to partner to clients, past clients, other lawyers and law firms, judges, referral sources, and family and friends of the new partners.
• List them as partners on the firm’s website, letterhead, and other promotional materials.
• Announce the promotion internally.
• Notify key clients personally.
• Update marketing materials.
• Celebrate the achievement within the firm.

Common Pitfalls with Non-Equity Partnership Programs

• Promoting solely based on time at the firm.
• Inconsistency
• Failing to define expectations after promotion.
• Confusing non-equity partnership with equity partnership.
• Ignoring leadership and business development capabilities.
• Providing the title without meaningful responsibilities.
• Failing to give constructive feedback to unsuccessful candidates.

A thoughtful attorney career advancement program (partner track) improves the odds of success for both the attorney and the law firm. It recognizes professional achievement while ensuring that new non-equity partners support the firm’s long-term success.

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John W. Olmstead, MBA, Ph.D, CMC

Sep 30, 2026

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Law Firm Succession Planning in a Multi-Partner Firm – Where to Begin?

Question: 

Our firm is a twelve-lawyer litigation firm in Chicago. We have six equity partners and six associates in the firm. One of our partners is 85 and the others are 78, 72, 69, 58, and 52 respectively. We have no succession plan in place, and we have done nothing for prepare for eventual transition. Any suggestions on where and how we should start?

Response:

You need to begin to have some serious discussions with your senior partners as to their retirement goals and timelines and determine how close together their exits will be. Can the remaining three partners hold and serve the clients? How experienced and senior are your associates? I suspect that you will have a large talent gap and you will need to either bring in some experienced lateral talent or consider merging with another firm. This could take a considerable amount of partner time and needs to be managed like you would manage a project, otherwise you will not have the focus and momentum to keep a things on track.

A key question will be how your partners will manage the work of the succession/transition/project while continuing to practice, serve clients, and managing the firm? How will they balance billable client production with the non-billable time that a succession/transition/project will require? Otherwise, the project will drift, will not be prioritized, and will fail to receive the proper attention to keep it moving forward. Newspaper reporters are taught to ask the following question when working on a story:

• Who
• What
• Where
• Why
• When
• How

To succeed at managing a succession/transition/project you will need to ask and answer and address many of the same questions.

WHO

Who will lead, direct, and manage the project? In a solo or solo owner firm, this may be the owner, or an outside consulting firm retained to lead, direct, and manage the process. In a larger law firm, this may be the management or executive committee, a managing partner, or a transition committee formed for such purposes. Larger firms may also retain a consulting firm as well. Other outside advisors such as certified public accountants, financial planners, and insurance professionals may also be involved as well. Specific roles, expectations, and accountability should be developed for everyone, inside and outside the firm that will be working on the project.

WHAT

What is the specific nature of the project? The law firm should define the succession/transition project specifically. Will the project involve looking into all possible transition/succession/ options or will it be limited to a single specific option, such as sale of the practice to another law firm, admission of a non-equity partner or associate to equity ownership, or merger with another firm? Define the specific scope of the project and put it in writing in the form of a succession/transition/ project charter or project plan. Define desired outcomes.

WHERE

If the firm has multiple offices what office location, is the primary focus? In the case of a practice sale or merger, what geographical areas should the candidates be presently located? Will the project team have to be located in the same area as the law firm? Can the law firm and team members be located in different locations? Will the law firm require face-to-face team meetings? Will the meetings be able to be held remotely?

WHY

Why is the succession/transition/ project necessary? Why the project being considered? What are the consequences for failing to start and successfully complete the project – loss of key clients – loss of retirement payout and or sweat equity from the practice? Why is important to start the project now – rather than later?

WHEN

When should the succession/transition/ project start? When should the project be completed? What are the key milestone dates, specific tasks, and specific task start and completion dates?  Examples of two milestone dates in a larger firm that has a transition/phase-down plan might be.

1. Start phase-down – January 1, 2020
2. Retire – December 31, 2020

HOW

The HOW involves the how of managing the project. In other words, some of the basic project management tools used to keep the project:

• Focused
• On schedule and on time
•  Fluid and moving forward.

The HOW also involves deciding upon and implementing the succession/transition/strategy that achieves the goals of the solo, sole owner, or equity owners in a larger law firm. Usually, the project planning HOW leads to the specific strategy and implementation HOW. The strategy and implementation HOW might involve selling the practice, admitting a non-equity partner or associate to equity ownership, or merger with another law firm. In the case of a larger law firm, it may involve the specific transition and phase-down activities.

If you put in place a solid project plan your partners will be able to balance priorities and transition the firm in a timely and effective manner.

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John W. Olmstead, MBA, Ph.D., CMC

Sep 23, 2026

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Insurance Defense Law Firm Survival in the Age of AI

Question:

I am the managing partner of a sixteen-lawyer insurance-defense firm in Orlando, Florida. There are four equity partners in the firm, twelve associates, and eight paralegals plus administrative personnel. We manage the defense for various insurance company’s  insured primary in auto accidents, premises liability, and slip and falls cases. Our work comes primarily from four insurance companies. All of our clients are billed by the hour at low hourly rates with restrictions on the amount of time that we can spend on certain matters. We have resisted using any form of AI and we are continuing to staff our client cases as we have always done. Our clients are asking us what and how we are implementing AI and to reduce associate and paralegal time spend on their cases. I realize that we must change our ways and begin to implement some level of AI in our practice. However, I have concerns as to how we survive in a practice where partner livelihood in a low bill rate practice has been based on high billable hours and the profit margin off of associates and paralegals. What do you see as the impact that AI is having or going to have on insurance-defense law firms?

Response: 

AI is likely to have a major impact on insurance-defense law firms. Associates may not be totally replaced as firms will be able to handle more cases with fewer billable hours. Insurance companies will expect faster turnaround of their cases at lower costs. Implementation of AI by insurance company outside law firms will be a requirement.

Insurance-defense law firms will see the following changes:

1. Much of the following associate attorney document related work will be handled by AI. (Many of our plaintiff personal injury clients are already using AI for this work):
   1. Summarizing medical records
   2. Reviewing claim files
   3. Summarizing depositions
   4. Extracting facts from police reports and incident reports
   5. Chronologies and litigation timelines
   6. Legal research
   7. First drafts of motions and briefs
   8. Discovery requests and responses
   9. Interrogatory analysis
   10. Drafting correspondence to adjusters
   11. Comparing pleadings against the facts in the claim file
   12. Identifying missing evidence
   13. Preparing deposition outlines
   14. Reviewing expert reports
   15. Analyzing large document productions
2. Billing will shift from the billable hour to various forms of alternative billing. Several years ago, several major insurance companies shifted to flat-fee models and more insurance companies are likely to do the same. Several of our clients have reported that their effective rates have been higher under flat fee billing than they were when they were under hourly billing. AI will increase law firm productivity, but it will also decrease billable hours. Insurance-defense firms will have to find ways to maximize revenue and profitability under the new paradigm.
3. Insurance companies will become more demanding than ever and expect more from their law firms. They will use AI to measure their law firm’s performance and case outcomes. AI therefore will not only change what defense lawyers do. It will change what their clients can measure about them.
4. The pyramid model of stacking associates and paralegals could dramatically change. Gone will be the days of partners living off the profits from the labor of associates and paralegals. Firms will not need as many junior lawyers per partner and their will have an effect upon:
5. AI may make experienced lawyers more valuable and trial lawyers may become more valuable.

When it is all said and done a major question will be:

1. What will be the billing model? Hourly billing, hybrid hourly billing, contingency or success fee, etc.?
2. Who will receive the most benefit – the law firm or the insurance company for increased productivity?

With reduced billable hours insurance-defense firms will have to either reduce associate/paralegal headcount or increase their case volumes. Business development will become more critical as opposed to simply relying on a handful of insurance company clients.

While AI is having and will continue to have a transformational impact upon society as well as law firms, we have seen this before with other forms of technology and law firms have successfully adapted and I believe that we will once again.

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Sep 16, 2026

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Law Firm Management – Characteristics of an Effective Administrator

Question: 

I am the managing partner of a twelve-lawyer business litigation firm in Toledo, Ohio. There are four equity partners, six non-equity partners, and two associates in the firm. Until three years ago I handled all of the administrative matters in the firm and was assisted by the firm’s bookkeeper. My practice and clients were suffering due to the amount of time I was spending handling the administrative concerns of the firm. So, the firm hired a professional legal administrator. Three years later it seems as if I am spending more time than before on administration and my practice is still suffering. Based on my readings it appears that our administrator is functioning more as a glorified office manager rather than an administrator. What are the characteristics of an effective (real administrator)? We are paying our administrator more than some of our non-equity partners and I don’t think we are receiving the value that we should be receiving. You comments and thoughts are welcomed. Thanks.

Response: 

Being the first administrator for a law firm is tough. In additional to proving themselves to the partners the new administrator will have the additional task of justifying the position itself. After a few months when the honeymoon is over some partners will start questioning whether the position is necessary and worth the expense. Often law firms have not really thought through what their expectations were for the position prior to hiring the administrator. Successful administrators don’t wait for the firm to manage them – they take a proactive role – initiate discussions regarding expectations and identify priorities, projects, etc. They look for low hanging fruit where they can  enhance revenue or reduce costs in the short term and track any results achieved.

It sounds like you have not clarified the role and documented role, responsibility, and authority in a well documented job description, don’t have agreement among the partners as to the administrators role and authority, or you hired the wrong person.

Skills and competencies are important but so are results. In order to maximize their value to their law firms, administrators must help their firms implement changes and improvements and improve performance. This requires selling ideas to partners in the firm and having them be accepted and actually implemented. To succeed administrators must:

– Provide innovative solutions or methods
– The firm must achieve measurable improvement in its results by adopting the solutions
– The firm must be able to sustain the improvements over time.

Based upon my experience working with firm administrators over the years and my discussions with managing partners, the following characteristics define successful firm administrators:

1. The more successful administrators understand their role, authority and responsibility, in accordance with the partners’ expectations.
2. The more successful administrators understand the firm’s current and evolving culture, and are capable of integrating and changing their behavior as required.
3. The more successful administrators have the capability of shifting their management style as conditions and relationships in the firm change.
4. The more successful administrators have intuitive personal characteristics and professional skills that enable them to perform their roles to satisfy the partners’ objectives and expectations.
5. The more successful administrator have the ability to successfully implement and manage projects, over an extended period of time.

An administrator’s success with a given law firm will have a direct correlation to his or her level of acceptance by the partners. The firm’s culture will determine the value that the managing partner and members of executive committees place on their administrator.  An administrator whose personal style may be characterized by partners as “too laid back” may be inappropriate for a fast-pace entrepreneur firm and an administrator with a “Type A” personality may not succeed in a firm characterized by partners as “low key” or “laid back.”

In today’s law firms, partners place a much higher value on those administrators who understand, and are able to relate to the firms’ immediate and longer-term priorities. They seek to retain those administrators who perceive the firm from a “partner’s” perspective, not from an “employees’ point of view.” Partners’ value those administrators who are innovative and willing to question the status quo, and suggest changes for improving productivity and profitability.

The more effective administrators relieve partners of managing day-to-day administrative matters and save the firm’s lawyers time that can be directed to client billable work. These administrators have the ability to communicate with the managing partner and members of executive committees about management issues that should be brought to the partners’ attention. They have the ability to handle and resolve most administrative problems with minimal guidance from their managing partners or members of executive committees.

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John W. Olmstead, MBA, Ph.D., CMC

 

Sep 09, 2026

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Law Firm Associate Recruiting and Retention Strategies in a Sole Owner Firm

Question:

I am the sole owner of a general practice firm in Indianapolis, Indiana. I have been in practice for 45 years and I am the only lawyer in the firm. I have a receptionist and a paralegal that also serves as my office manager and bookkeeper. I have tried hiring associates over the years, several times, but after spending time training them they eventually go elsewhere. I would like to reduce my workload and eventually retire. How should I approach finding and keeping an associate differently? Thank you for any ideas that you may have.

Response: 

This is a common and a major challenge for sole practitioners and small-firm owners. The mistake many owners make is viewing the associate primarily as someone who will help the owner get the work done. If you are approaching retirement, I would encourage you to look at the issue differently. Your next associate may not simply be an employee. He or she may be your future successor. This changes the recruiting, compensation, training, management, and retention equation.

I am sure that the turnover that you have experienced has been frustrating. Your reaction may be “Why should I spend the time and money training another associate if he or she is just going to leave?” Your problem may not be that you have failed to find good associates. You may have failed to give good associates a compelling reason to stay.

I suggest that you think about and ask yourself the following questions:

Question 1: Why are your associates leaving?

Determine why lawyers are leaving. Do not assume the answer is compensation. It may be. But associates also leave because they don’t see a future with the firm. After two or three years, the associate may be asking:

• What is my future here?
• How much responsibility will I have?
• Will I ever become a income partner? Equity partner?
• What does it take to become a income partner? Equity partner?
• How will my compensation progress?
• Will I have an opportunity to develop my own clients?
• Will I be involved in important decisions?
• Am I learning?
• Does the owner trust me?
• Does the owner value me?
• What happens when the owner retires?

If the associate cannot answer these questions, the lawyer may reasonably begin looking elsewhere. You need to stop thinking about retention as how do you keep this associate from leaving and think in terms of what kind of future you can offer this associate?

Question 2: Should you Pay Higher Salaries?

You should pay competitively. You cannot expect to retain talented lawyers if your compensation is substantially below the market. But simply increasing compensation every time an associate receives an outside offer is not a retention strategy. You should develop a total compensation and career advancement program. Such a program might include:

• Competitive base compensation;
• Performance-based bonuses;
• Benefits;
• Flexible work arrangements;
• Paid professional development;
• Mentoring;
• Meaningful client contact;
• Increasing responsibility;
• Business-development opportunities;
• Leadership opportunities;
• A clearly defined advancement path; and
• Potential ownership.

The last item may be particularly important. Since you eventually want to retire, the opportunity to become a partner—and potentially the owner of the practice—may be worth considerably more to the right lawyer than another few thousand dollars of annual salary.

Question 3: Does the Associate Even Want to Become a Partner?

Thirty years ago, I would never have to ask an associate during an interview if they wanted to become a partner or own a law firm as everyone would have said yes. This is no longer the case. Not every good associate wants to become an owner. Some lawyers want a long-term professional position without ownership responsibilities. Others may want partnership but not equity ownership. The important thing is to find out. Ask, what does your ideal career look like five years from now? You may discover that the associate’s goals and the firm’s goals are highly compatible. Or you may discover that they aren’t.

Question 4: Should You Tell the Associate That You Eventually Want to Retire to retire? 

If retirement is reasonably foreseeable, I believe you should begin discussing the firm’s future. You don’t necessarily need to say that you are retiring in three years if you haven’t made that decision. However, you should be able to say that you are building this firm for the long term, and you want to develop lawyers who can assume increasing responsibility and potentially participate in ownership. This discussion can be extremely important. Associates are more likely to invest themselves in the firm if they understand that there is a future opportunity.

Question 5: Should you Involve the Associate in Management?

Yes—but progressively. An associate who may eventually become a partner or successor needs to understand that a law firm is a business as well as a professional practice. Over time, expose the associate to:

• Financial management;
• Billing and collections;
• Staffing;
• Compensation;
• Technology;
• Marketing;
• Client development;
• Budgeting;
• Vendor relationships;
• Strategic planning; and
• Firm policies.

You don’t need to give an associate full access to everything immediately. But if you expect the lawyer eventually to help run the firm, you need to begin developing management capability well before the transition.

Final Thoughts

If you are a sole owner approaching retirement, I would encourage you to look at recruiting and retention differently. Don’t ask only how can you find a good associate – ask – how can you find, develop, and retain the lawyer who could eventually become the next leader of your firm? The answer to this question changes the entire strategy and you will begin thinking about succession much earlier. The ultimate objective isn’t simply to retain an associate for another year. It is to create a professional environment in which a talented lawyer can say – I can see my future here.

If you don’t develop a successor, you may eventually find yourself with:

• No one to take over your clients;
• No internal buyer;
• A less transferable practice;
• A more difficult sale;
• A rushed transition; and
• Reduced negotiating leverage.

The solution isn’t to avoid developing people, it is to develop them within a deliberate succession strategy. One of the biggest mistakes I see is sole owners waiting too long. A successful succession often requires several years. The owner must have time to:

• Identify potential successors;
• Develop them;
• Transfer clients;
• Transfer knowledge;
• Build leadership capability;
• Establish financial expectations;
• Determine ownership arrangements;
• Address compensation;
• Develop a transition timetable; and
• Test whether the successor is actually capable of assuming control.

In todays competitive market for talent you may find that you are unsuccessful in finding, hiring, and retaining an associate that is able or willing to be your successor. I am finding this to be the case with many sole-owner firms. In these situations, an external strategy such as merger or an Of Counsel relationship with another lawyer or firm is the course taken.

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John W. Olmstead, MBA, Ph.D, CMC

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