Law Practice Management Asked and Answered Blog

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January 2020

Jan 22, 2020

Associate Performance and Coaching

Question:

I am a partner in a three attorney law firm based in Orlando, Florida. I did a quick Google Search this morning and stumbled upon your excellent blog posting – Associate Attorney Compensation. John did an excellent job in answering the attorney’s question. We have an associate who I like very much; however, heading into her 3rd year with the firm, she has gotten a bit comfortable with our laid back style of management. Our situation is similar in many respects to the situation posted by the Chicago attorney.

I would like to find out more about whether coaching could help us improve our associate’s performance. Her billable hours are 800 per year and net profit after deducting her salary, benefits and assigned support staff from her collected fees is around $15,000 and this does not take in to account other office overhead. Frankly, I am a bit hesitant to spend more money on her practice area as it is not really producing a profit for the partners in the firm. However, I am exploring ways that we can improve the situation for this part of the law firm. I look forward to chatting with one of you. Again, I enjoyed reading the article.

Response:

Whether coaching can help depends upon the specific situation and the cause or causes of the problem. It sounds like you might want to kick the can down the road and have someone deal with the oversight responsibility that you and your partner should be handling. Typical causes of poor associate performance include:

Lack of or non-existent performance expectations in terms of hours worked per week, billable hours, fee collections, etc.
Poor mentoring or supervision by you and your partner.
Lack of work.
Poor work ethic and not putting in appropriate number of work and billable hours.
Poor time management habits.
Poor timekeeping habits.

An outside coach could possibly be helpful if the problem is poor time management or poor timekeeping habits. You would want her on board with using an outside coach and might want even to consider having her pay half of the coaching fee. However, if the problem is one or a combination of the other three areas, an outside coach might be a waste of money. Maybe you and your partner need coaching on the top three areas. It is also possible that you simply have an associate that wants to work nine to five and may not be wrong person on the bus. Successful professional service providers whether they be attorneys, accountants, or management consultants don’t work forty hour or less weeks – they work fifty hour plus weeks.

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

Jan 08, 2020

Law Firm Partner Compensation and Performance Reviews

Question:

Our firm is a fourteen partner firm in the northern suburbs of Chicago with ten partners and four associates. We are a general practice firm with different partners focusing on specific practice areas. Our partner’s compensation is determined by a three member compensation committee. The compensation committee uses a combination of quantitative data based upon working attorney fee collections and client fee originations and makes a subjective determination regarding other contributions that a partner has made to the firm. The problem that we have is the compensation committee does not have a way to effectively measure the other contributions that are being considered subjectively. We would appreciate your thoughts.

Response:

Your problem is a common problem. While it is easy 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 into their compensation systems. Some firms:

Measure client retention and solicit feedback from present and former clients
Measure client satisfaction scores
Require annual business plans from each partner to be approved by the compensation committee with specific measurable goals for the upcoming year
Conduct partner peer reviews via online questionnaires
Conduct annual partner performance reviews (compensation committee)

Partner performance reviews are often avoided like the plague by many firms. 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.

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