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October 2012

Oct 31, 2012

Developing a Law Firm Associate Career Progression/Partnership Admission Program


Our firm is a 14 lawyer firm in Phoenix, Arizona. We are a new firm (formed 8 years ago) and we have 5 equity partners and 9 associates. Several of the associates have been with us since day one (8 years) and are asking us about partnership. We want to be fair and keep our top talent. What are your thoughts on this topic?


A common complaint that we hear from our interviews of associates is lack of feedback on short term performance and what is takes to "make partner" and how they are progressing toward eventual partnership. During a recent interview an associate told me – I would like to know:

  1. What does it take to become a partner – consideration criteria? What do I have to do?
  2. What is the timeline for consideration?
  3. How am I doing – am I partnership material?
  4. What does partnership mean in this firm?
  5. What are the mechanics of admission? (Is there a buy-in)

I suggest that you and your partners consider developing what I call a Law Firm Associate Career Progression/Partnership Program and put it in writing. Here is an approach you might take:

  1. Determine if you want more partners? How many – evaluate the appropriate ratio.
  2. Consider non-equity partners as a first step and determine what that means.
  3. Establish a minimum number of years for consideration – i.e. seven years.
  4. Determine competencies and expectation for associate development and document.
  5. Develop an associate performance evaluation form and conduct formal annual evaluations.
  6. Develop partner admission criteria (associate to non-equity and non-equity to equity partner) and document.
  7. Write-up an overall program document and include as attachments the competencies document, the performance evaluation form, and the admission criteria document.
  8. Present the program to associates in a live meeting format to launch the program.

Regarding equity partnership – make the criteria tough – and require a buy-in or capital contribution. Business development and a client following should be required by most firms for the equity tier. 

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


Oct 23, 2012

Redesigning a Law Firm Compensation System – 8 Attorney Firm – 4th Year of Practice


We are an 8 attorney law firm in Evansville, Indiana. We have five members and three associates. We started our firm four years ago. Each member has an equal share for both ownership and compensation purposes. We cut the pie equally. After four years some of the members feel that the equal sharing approach is no longer working and we need to consider a different approach to compensation. I would appreciate your thoughts on how we might get started on modifying our approach.


Virtually all successful compensation systems feature two common qualities that are linked to
each other and stand the test of time.

First, a successful system must be fair and be perceived as fair by the partners who
are  essential to the firm’s economic success and reputation.  The perception of fairness is critical.  To determine if a system is fair, partners can ask the following questions:

  1. Do  I understand the system?
  2. Does the system recognize what individuals contribute to the organization?
  3. Are the rules clear?
  4. Are the rules followed and applied in a consistent manner from person to person from year to year?
  5. Are the compensators individuals who are trusted and respected?               

A second quality of successful compensation systems is that of simplicity.  Research has shown that there is a direct correlation between the simplicity of compensation systems and the degree to
which partner understand how their compensation is determined.

The challenge is structuring a compensation system for a law firm is in selecting the best mix of appropriate compensable criteria and the right amount of participation that is consistent with the firm’s needs and its culture. 

Before you go very far you should address what type of firm you are trying to build – Lone Ranger (a group of individual practitioners) or firm-first (a team-based firm). In other words "are we in this together." The answer to this question will provide a clue as to whether eat-what-you kill or other approaches to compensation will be appropriate.

Changing your compensation system is difficult and should be approached carefully and thoughtfully.

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


Oct 16, 2012

Maximizing Law Firm CLE Investments


We are a 18 attorney firm in Wheaton, Illinois. We have started the preparation of our budget for 2013 and are looking for ways to maximize the benefits from our CLE and other training and education investments. Any ideas?


Training and skill development is not easy. Studies reveal that 90 percent of the people who attend seminars and training sessions see no improvement because they don’t take the time to implement what they learn. Practices create habits and habits determine your future. Up to 90 percent of our normal behavior is based on habits. The key to skill learning is to get the new skill to become a habit. Once the new habit is well developed it becomes your new normal behavior. This requires practice. Unfortunately, law firms do not give employees time to practice and experiment.

Research on memory and retention shows that upon completion of a training session, there is a precipitous drop in retention during the first few hours after exposure to the new information. We forget more than 60 percent of the information in less than nine hours. After seven days only 10 percent of the material is retained. Most memory loss occurs very rapidly after learning new information. Your attorneys and staff can improve their memories by:

Skills become automated through practice. The more we perform a set of actions, the more likely we are to link those actions into a complete, fluid movement that we do not have to think about. With enough practice, employees can become fluent in many different physical and mental skills.

Provide your attorneys and staff with time to practice and experiment. Schedule lunch and learn programs. Provide ongoing training in small bite size chunks relevant to the needs of the firm in a just-in-time fashion.

Use it or lose it!

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

Oct 09, 2012

Survival Tips for Law Firm Legal Administrators


I am the Director of Administration with a 45 attorney firm in Des Moines, Iowa. I am new to this position and could use some pointers on what I need to be successful in my role. This is my firm law firm.


Few things are as important to an administrator’s future as that person’s ability to influence the decision-making process and effect change.   Skills and competencies are important, but so are results. To transcend to the next level and enhance your value to your law firm, you must help your firm actually effect positive changes and improvements and improve performance. This requires selling ideas to partners in the firm, and having them accept and actually implement those ideas. To succeed, you must achieve three outcomes:

1.  You must provide new solutions or methods.

2.  The firm must achieve over time  measurable improvement in its results by having adopted the
     solutions, and

3.  The firm must sustain the improvements over time.

Click here for our blog on governance 

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

Oct 02, 2012

Law Firm Governance and Structure – Impact Upon Competitiveness


Our firm is in Nashville TN and we currently have 12 attorneys – 7 partners and 5 associates. We are an eat-what-you kill law firm. In essence we operate as separate profit centers and operate in our own silos. We all have to come together and agree on any and all management decisions. Our management team consists of "all partners". We do not have a office administrator, office manager or even a managing partner. We all have the freedom to do as we please and there is very little accountability to each other. Recently we have been discussing the pros and cons of why we might want to change our governance and overall structure. I would be interested in your thoughts.


I believe that law firms that are "firm first" team based firms and organized along these lines have (or will have) a competitive advantage with respect to clients, legal talent, and merger partners. As law firms grow the "lone ranger" confederation approach no longer works. Decision-making is too time consuming, partner time is wasted, and opportunities are missed. Synergy (where one plus one equals three or four) is not achieved and the firm achieves little more than any one of the attorneys could achieve in solo practice.

Recently I was working with a similar size firm in Chicago that was looking for a merger partner. When the other firm learned that my client was a "lone ranger" firm they discontinued discussions. Larger firms that are "team-based" are not interested in merging with "long ranger" firms – they tend to cherry pick key talent from these firms rather than pursuing mergers or combinations.

Click here for our blog on governance and structure 

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


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