Law Practice Management Asked and Answered Blog

Category: Management

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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

Oct 14, 2026

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

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 02, 2026

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Law Firm Management – What is Keeping Law Firm Owners and Managing Partners Awake at Night

Question:

I am the managing partner of a ten lawyer firm in Kansas City, Missouri. There are five partners and five associates in the firm. We are an insurance defense firm and our clients are a handful of insurance companies. Our cases are primarily slip and fall, premises liability, and auto accident cases. I have been the managing partner for two years and frankly I am getting burned out on the position and none of the other partners want the job. I am working 60-70 hours a week and am spending so much time on administrative matters that I don’t have time to practice law. I would be interested in what is keeping managing partners in other insurance defense law firms awake at night and how they are dealing with the challenges.

Response: 

Managing partners in small insurance defense firms are telling me that the following top five challenges and concerns are what are keeping them up at night:

1.Finding and Retaining Experienced Lawyers and Staff

This is the biggest issue facing many firms. Gone are the days when you could place an ad and have a position filled within 30 days. I have client law firms that it has taken over a year to find and hire experienced (3-5 years) lawyers.  Billable hour requirements of 1800 – 2000 hours are conflicting with work life balance goals of many young lawyers. Retention is also a issue. Losing a strong partner or associate can mean lost revenue, disrupted client relationships, and months of recruiting and training.

You must plan on a longer recruiting timeline and use all avenues available to you. For example:

• Multiple channels for placing job ads.
• Career center on the law firm’s website.
• Ad on Indeed
• Ad on Linked-In
• Ad on state and local county bar associations website’s career centers
• On campus recruiting at law schools
• Using a recruiter when all else fails.

You must offer competitive benefits, work life balance and flexibility. Some form of remote work has become a major requirement and failure to offer schedule flexibility and remote work has resulted in  many law firms losing candidates to other law firms.

2.  Client Concentration 

Insurance defense firms often have too few clients and many insurance defense firms are held hostage by these clients. I have some law firm clients that only have one insurance company client and if that client were to start using another law firm the law firm would be in dire straights. The client controls the amount of case assignments that the firm receives, the bill rate, and the amount of hours that can be charged for various tasks. The firm is so busy working on client files that no one has time to market and try to get additional clients. Partners often know they need a more predictable pipeline but don’t have time—or a repeatable system—for generating new clients. It sounds like your firm depends heavily on a handful of clients. Losing one major insurance company client can materially change the firm’s economics.

Insurance defense firms must find ways to invest the time and other resources to add additional clients to their client roster resulting in less dependence on one or a few clients and move their practice up market with improved hourly rates in areas such as insurance coverage, corporate representation, and self insured clients. Such diversification has made many firms less dependent on 2000 plus billable hours and more attractive you new lawyers.  Many insurance defense firms have effectively done this.

3.  Cash Flow and Collections

It has often been said that businesses are killed by inadequate cash flow. A firm maybe profitable on the profit and loss statement but is cash always tight?” Slow-paying clients, write-offs, uneven matter flow, and payroll/overhead create constant pressure.

4. Technology and AI

Law firms are trying to figure out where AI can genuinely improve operations and lower operational overhead without creating confidentiality, accuracy, ethics, cybersecurity, or malpractice risks. What tools should the firm be using? Costs? Time to implement? Fear of AI reducing the need for lawyers?

You need to attend all the CLE seminars, webinars, etc. that you can and get up to date on AI. This is moving very fast.

5. Succession Planning

What happens when founding partners want to slow down and retire?” How does the firm fund buyouts? Smaller firms frequently have fewer obvious successors. Do the younger attorneys in the firm want to have equity and own a law firm and will they be willing to step forward?

You need to begin addressing this sooner than later. Our blog library has an entire section on this topic.

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Aug 25, 2026

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Law Firm Governance and Management Structure for 14 Lawyer Firm

Question: 

I am a partner in a fourteen lawyer firm in Des Moines, Iowa with seven equity partners (shareholders) and seven associates. We are a business litigation firm exclusively. The seven equity partners (shareholders) have all been practicing law for fifteen years. We formed the firm five years ago when we all left a large law firm in area. The firm is structured as a professional corporation (PC). For the past five years we have managed the firm as a group with the seven of us making all of the management decisions. This requires us coming together at least once a week and often even more frequently. While this worked for us when we were smaller the amount of non-billable time it taking a toll on all of us. We have come to the realization that we have outgrown our management structure and are looking for a better approach to managing our firm. We are looking for ideas and would appreciate any ideas that you may have.

Response:

I understand your frustration and your experience is typical what I see in newly started law firms. While the approach you have taken to managing the firm made sense and worked when you started the firm five years ago, you have simply outgrown this approach and need to move to a governance/management structure more appropriate for a fourteen lawyer law firm. For a fourteen lawyer firm with seven equity partners, you have enough partners to benefit from more formal governance, but you don’t need the bureaucracy of a large-firm model. The key is separating day-to-day management from major ownership decisions.

Most smaller to medium sized law firms choose one of three fundamental varieties of management structure. These systems may be characterized as management by:

• Democracy
• Managing partner
• An executive or management committee

Democratic

This is the method that you have been operating under. Under a democracy each member of the firm has an equal voice in management. Any decision must be agreed to by all partners. Administrative tasks may be assigned or rotated among partners. Democratic firms traditionally progress more slowly and are less profitable than firms governed under one of the other structural models.

Managing Partner

This approach with a strong managing partner is probably the most efficient form of managing a law firm. Under this approach the administrative responsibilities for other partners in the firm may simplified as the result of the managing partner’s role, however this type of structure has many shortcomings and issues. Egos of the partners is a major issue is many firms. Also the managing partner came become overloaded with firm decisions and his or her law practice, as well as the firm, may suffer financially. The managing partner may not be able to devote the time or follow-through required to handle organizational and financial matters. Since no other partner may be trained in managing the firm, this partner may not feel comfortable in relinquishing power to anyone else. This is a problem which may be especially troublesome if the managing partner dies, becomes ill or disabled.

Some attorneys may be dismayed at the prospect of having their firm dominated by an individual or group of partners. However, if properly handled, this form of structure can be productive, and economically and professionally rewarding. To be effective, the managing partner should maintain communication with other partners. The managing partner should seek advice from other partners (and associates) on matters that will affect them. The managing partner should obtain other partners’ input on decisions, appoint individuals or committees of partners to perform particular functions and require a report of their achievements.

Executive or Management Committee 

The executive or management committee structural concept is a representative form of governance typified by a committee of partners having defined authority, accountability and responsibility. In most smaller firms this committee, frequently consisting of three partners, may be responsible for recommending and implementing policy for the firm, planning for the future, appraising results and recommending corrective action, as required.

I believe that a three partner executive or management committee might be the best approach for your firm and would be the best way to avoid deadlocks or inaction and to spread the burden of firm management among appropriate partners. One of the partners should be designated to chair the committee. Each of the other members may be assigned authority, responsibility and accountability for coordinating and/or performing specific functions. For example, one partner may serve as the financial partner. This would involve responsibility for insuring the preparation and analysis of income and expense budgets and financial reporting. This partner would oversee attorney production, fees, collections, etc. A second partner may be responsible for the personnel functions including associate career development, i.e., employment, training, evaluation, etc., and implementation of policy for the administrative staff. A third partner may serve as the general administrative partner, and oversee the implementation of administrative policy, systems, automation, etc. These partners may be assisted by an office manager, bookkeeper, etc.

To preserve continuity in the management function, it is recommended that tenure of partners on the executive or management committee be staggered over a two or three year period. The executive committee should communicate with the partners regularly or as issues arise. The executive committee should meet weekly, or if that isn’t convenient, as frequently as required. To keep all of the partners apprised of issues before the executive committee meeting is held, it is recommended that the meeting agenda be distributed to all partners within 48 hours prior to the scheduled meeting. Partners should be encouraged to discuss, with members of the executive committee, any items listed on the agenda or recommend subjects for discussion. Following this meeting, minutes should be prepared and distributed to all of the partners for information purposes.

Meetings with all of the partners (shareholders) should be scheduled at least quarterly and possibly even monthly.

You did not indicate whether your firm has a firm administrator on your staff. I believe that this may be a good time to consider hiring a firm administrator and that role should be incorporated into the firm’s management/governance plan. The firm administrator should handle all administrative matters and the the management committee should focus on higher level management matters. The full equity shareholder membership should weight in only on matters reserved for their vote and approval.

You should document your governance/management structure in your shareholder agreement. For example:

Specific policy matters that might be reserved for full equity shareholder vote might include:

• Non-equity partner/member and equity partner/member admission
• Practice composition
• Type of practice
• Size of firm
• Long range planning
• Firm goals, mission, and vision
• Merger or dissolution

Specific policy matters that might be the domain of the management/executive committee might include:

• Equity partner compensation
• Non-Equity partner compensation
• Associate compensation
• Lawyer and paralegal recruiting
• Legal staff compensation
• Budget approval
• Practice management
• Billing practices

Your shareholder agreement should clarify who decides what, by what vote, and within what financial/authority limits. It should address management, voting thresholds, partner rights/duties, compensation, and partner withdrawals.

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

Jul 29, 2026

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Law Firm Operations Management Exception Report

Question:

I am the owner of a five-lawyer estate planning/administration firm in Fresno, California. The other four lawyers are associates in the firm with estate planning and administration experience ranging from one year to ten years. We have three paralegals, a office manager/bookkeeper, and a receptionist. We are using state of the art cloud-based practice management software for billing, accounting, calendaring, document storage and management, and lead tracking. We use MS 365 products for e-mail and word processing. We use specialized cloud-based software for estate planning document drafting and preparation. While most of our estate planning work is billed on a flat fee basis we keep timesheets on all matters – flat fee and time bill matters.

As the firm owner and manager, I am finding it difficult to manage the store. Getting the attorneys to stay focused and attain their billing/collection targets is a major challenge. Recently we have had situations such as the following:

1. Estate administration matters that have not been worked on for months resulting in client complaints and retainers tied up in the IOLTA account where work has not been done and can’t be billed.
2. Estate planning matters where clients got tired of waiting three months for their estate plans and fired the firm, requested refunds, and took their work to competing law firms.
3. Lawyers that are way short of their production targets. Some are not even billing/collecting $300,000 a year and are being paid salaries of $150,000 plus a year.

I receive more reports from our bookkeeper than I even have time to read – alone understand what they mean. I need better tools to stay on top of things. Any ideas that you may have would be appreciated.

Response: 

I understand your frustration. Years ago, when computer software was first being implemented in law firms a managing partner told me – “I am tired of receiving reams of paper every time I want to know the status of something. I want to be able to push one button on the computer, have the information that I need in one minute, and printed on one piece of paper.”

Since those days there has been improvement but getting the information you need and when you need it can still be frustrating.

Many of the leading law firm software developers are beginning to incorporate dashboards into their software and this is providing some assistance. However, these dashboards often do not provide the precise information or reporting flexibility that is needed.

What is drastically needed is a law firm operations management exception report that presents you with red flags and identifies areas in the firm that require leadership attention. Rather than reviewing pages and pages of detailed reports and every operational metric, an exception report focuses on exceptions—areas where performance is significantly above or below target, deadlines have been missed, risks have emerged, or corrective action is needed. For example:

1. List of client matters that have not been touched (worked on) for x days per timesheets, calendar entries, etc.
2. List of lawyers that billable hours, fee collections, are below target.

The goal of management exception reporting is to enable owners and managing partners to manage by exception, and spend their time on issues that require decisions rather than reviewing detailed and lengthy operating reports.

I suggest the following:

1. Ensure that you are using all of the capabilities of your practice management software.
2. Fully deploy your dashboards if your software supports them. Some systems require a higher-tier subscription to access dashboards or full customization. Check with your software provider.
3. Ask your software provider if, for a fee, they will provide you with a customized report.

Recently one of our clients was able to have a custom report designed for them that allowed them to query the system and have exception report of matters no touched – no work done for a specified number of days, etc. A fee was charged for the development of this report.

Software is getting better with dashboards, etc. but often custom reports are still required.

Talk with your software vendor.

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

Apr 08, 2026

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Law Firm Owner – Lawyer or Businessperson?

Question: 

I am the owner of a three attorney general practice firm in Chicago, Illinois. The other attorneys were recently hired associates right out of law school. We have two legal assistants, one paralegal, and a receptionist/bookkeeper. I manage the firm and practice law. I am finding it more and more difficult to do both and I am discovering that I enjoy managing and running the business more than I do practicing law. I would like to spend all of my time to running and managing the firm. Your thoughts are welcomed.

Response: 

You are not alone. This is a common problem in law and other professional service firms. I have similar problems in my own firm – it is very difficult to serve two masters – serving your clients and managing your firm. Eventually as you grow you have to pick one – client service (doing legal work) or managing and running your business – as the area that receives your primary focus. This is not to say that you should not do both – but you select the primary area that you are going to focus on and get help with the other area.

A question that I typically ask my new law firm clients – what do you want to be or do – be a business person or a lawyer. The answer to the question often provides a hint to how you should structure your firm. If you want to be more of a business person – hire legal talent to help with serving clients and performing legal work and spend more time working on your firm rather than in it. If you want to be more of a lawyer and do legal work and serve clients hire a legal administrator or business manager (this is more than an office manager) to manage and run your firm.

I have more and more owners of small law firms that are managing their law businesses and not practicing law. I believe the appropriate direction is what makes you happy and what type of work you enjoy doing. Your practice should support and fulfill your personal goals, what you want out of life and what makes you happy. If that is managing – then manage. If that is doing legal work – do legal work.

Two great books on this subject are – The E-Myth Revisited and The E-Myth Attorney – available on Amazon. The theme of both of these books is:

• Work on your business rather than in it.
• Small business owners wear three hats – entrepreneur (10%); manager (20%); and technician (70%)

Small law firm owners often spend too much time being the technician (i.e. lawyering) and not enough time managing and innovating. In the long term this can have a negative effect upon value when the owner decides or retire of otherwise exit the practice.

Think about where you want place the priority of your focus – working on your firm (business) or in it.

I believe that at your current size and your limited number of revenue producers you can’t afford to be a full-time manager until the firm grows to at least five lawyers and or several serious revenue producing paralegals (not dabblers but producing $150,000 – $250,000 per year). I suggest that you take a phased approach toward this goal. In the short term you may have to work harder as a revenue producer and a manager and business developer. In the meantime you will have to wear both hats. Be patient.

As AI continues to reshape all walks of life as well as the practice of law, firm management and innovation will become even more important to remain competitive. This is a strategic management area that will require more of your management time. Small law firms that have implemented AI are reporting efficiency gains that have translated into higher profitability and improved well-being.

• Increased Matter Capacity. Firms have reported 10% to 40% increases in matter capacity per attorney after implementing AI, leading to significantly higher revenue potential.
• Pricing Flexibility: High efficiency is allowing sole owners to move away from billable hours toward more profitable flat-fee or value-based pricing, which 38% of prospective clients believe will make services more affordable.
• Work-Life Balance: Instead of working 70-hour weeks to keep up, solo attorneys are using AI to reduce their hours while maintaining—or even increasing—their income

Good luck with your transition.

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Mar 04, 2026

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Law Firm Management Structure for a Small Insurance Defense Law Firm

Question:

I am a partner in a eighteen – lawyer insurance defense firm in Houston, Texas. There are ten equity partners and eight associates in the firm as well as an office manager/bookkeeper and six other paralegals/legal assistants. We started the practice nine years ago. Other than administrative matters handled by our office manager, the management of the firm is handled by involvement of all the partners. Currently, we are getting more and more frustrated with this method of governance and management. It takes forever to make decisions and the quality of our decision-making leaves a lot to be desired. It recently took us nine months of discussions to agree to get the carpet cleaned. There has to be a better way. What are you finding that similar law firms are doing?

Response: 

Your experience and current frustration is what we see in law firms using the “democracy approach.” While it made have been a good approach when you started the firm and were smaller, you have outgrown this approach.

Most smaller to medium sized law firms choose one of the following approaches to governance and management.

1. Democracy
2. Managing Partner
3. Executive or Management committee.

Democracy

This is the method your firm is currently using. Under this method each member of the firm has an equal voice in management or in some cases a voice based upon the number of equity shares held. Any decision must be agreed by all partners, and various administrative tasks may be assigned or rotated among partners or delegated to an office administrator or office manager. While benefits to the partners by participating in firm management is influence and control over their own practices, law firms that utilize this method of governance progress more slowly and at a less profitable rate than firms governed under one of the other approaches to governance and management.

Managing Partner

This approach is probably the most efficient form of managing a law firm.  Authority and accountability for all firm matters is controlled by one partner or a tightly knit group of dominant partners. The managing partner is often responsible for originating and retaining the firm’s major clients. The managing partner may  receive all work assignments from clients and assign work out to other partners and associates. The managing partner typically determines the partners’ and associates’ compensation and perquisites.

While the other partners may be able to focus entirely on billable/productive legal work, this type of structure is not the best approach for many firms. A major fundamental problem involves partners being “left out” totally of the management of the firm. The managing partner becomes overloaded with firm decisions. Furthermore, as an active attorney, this partner may not be able to devote the time or follow-through on management and operational matters. Since no other partner may be trained in managing the firm, this partner may not feel comfortable in relinquishing power to anyone else. This is a problem which may be especially troublesome if the managing partner dies, becomes ill or disabled.

Some attorneys may be dismayed at the prospect of having their firm dominated by an individual or group of partners. However, if properly handled, this form of structure can be productive, and economically and professionally rewarding. To be effective, the managing partner should maintain communication with other partners. The managing partner should seek advice from other partners (and associates) on matters that will affect them. The managing partner should obtain other partners’ input on decisions, appoint individuals or committees of partners to perform particular functions and require a report of their achievements.

Executive or Management Committee 

The executive or management committee is an approach typified by a committee of partners having defined authority, accountability and responsibility. In most smaller firms this committee, frequently consisting of three partners, may be responsible for recommending and implementing policy for the firm, planning for the future, appraising results and recommending corrective action, as required.

A three partner-executive or management committee is the most common configuration used to avoid deadlocks or inaction and to spread the burden of administration among appropriate partners. One of the partners should be designated to chair the committee. Each of the other members may be assigned authority, responsibility and accountability for coordinating and/or performing specific functions. For example, one partner may serve as the financial partner. This would involve responsibility for ensuring the preparation and analysis of income and expense budgets and financial reporting. This partner would oversee attorney production, fees, collections, etc. A second partner may be responsible for the personnel functions including associate career development, i.e., employment, training, evaluation, etc., and implementation of policy for the administrative staff. A third partner may serve as the general administrative partner, and oversee the implementation of administrative policy, systems, information technology (IT), etc. These partners may be assisted by an office administrator, office manager, bookkeeper, etc.

To preserve continuity on a management/executive committee, it is generally recommended that tenure of partners on the executive or management committee be staggered over a two-or-three year period. The executive committee should communicate with the partners regularly or as issues arise. The executive committee should meet weekly, or if that isn’t convenient, as frequently as required.

Meetings with all of the partners and associates should be scheduled monthly or quarterly.  Following the departure of the associates, the partners can discuss matters relating to financial and policy issues.

I believe that based on your present situation and past history you should consider a three-member management committee with a governance plan that outlines that responsibilities and authority of the committee and the full partnership. Identify and outline the restrictive decision areas that the require full partnership to weight in on and vote.

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

Feb 18, 2026

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Law Firm Leadership – Midsize & Smaller Firms

Question: 

I am a partner in a 30 lawyers insurance defense firm in Phoenix, Arizona. We have 7 equity partners, 10 non-equity partners, and 13 associates. We represent insureds through insurance companies that are our clients and pay our bills. We also represent self-insured companies as well. Our firm is in second generation. The original founding partners have all retired and they are the ones that brought in all of the clients and managed and ran the firm. The firm was primarily run by a strong managing partner. Since the founding partners retired we have been struggling in managing the firm, getting new clients, and finding and retaining lawyers and staff. Now all seven partners are involved in managing the firm and while we are all good lawyers we are not good managers or leaders. The firm has lost clients and lost lawyers and we are struggling. All our partners want is to work in their own silos and work on their files and cases. They consider firm management “non-billable” and not deserving of their time. Do you have any thoughts?

Response: 

Law firms are finding that developing effective leadership skills can be a very difficult task. Dealing with leadership is a very emotional issue for most law firms due to the independent nature of most lawyers and the general unwillingness of firm lawyers to put aside their personal interests for the good of the firm. In fact, in many cases existing law firm partnership structures and compensation systems reinforce this tendency. What is needed is a balance between partner autonomy and partner accountability. Leaders will either have to be recruited externally (i.e. lateral partners) or skills will need to be developed internally.

The firm can begin by conducting a self-assessment using the following 10 point checklist:

1. Only the best should lead and be placed in key leadership positions. Does the firm have its most capable people in leadership positions?
2. Does the firm have partners or other lawyers with leadership skills or potential leadership skills? How many?
3. How many lawyer leader positions are there in the firm that require leadership skills? How many lawyers have these skills?
4. Does the firm’s compensation system reward management and leadership activities?
5. Does the firm’s compensation system have a team reward component and are non-billable firm investment activities respected and rewarded?
6. Does the firm’s culture support a team orientated practice or an individual type practice?
7. Does the firm’s governance structure provide for administrative, management, and leadership roles and responsibilities?
8. Does the firm have an in-house leadership training and development program?
9. Does the firm invest and budget funds for leadership development?
10. Is the firm willing to make the commitment?

While professional non-lawyer executive directors, administrators, and office managers can provide some relief, the equity partners must still develop appropriate leadership skills and perform upper-level leadership roles. In some firms these skills are simply latent and need to be identified and appropriately reinforced. In other firms such skills are nowhere to be found. Such firms will have to either recruit partners with requisite skills from the outside or develop leadership skills internally. This will take time and will require dedication, focus, patience, and hard work.

This author believes that improvements in law firm leadership will only come about as a result of improved leadership selection and action orientated leadership development programs. Attorneys must begin to shift their attention from a transaction orientation to a firm-first client orientation. Attorneys must begin to make investments in non-billable time and consider such as investments for the future. Attorneys must begin to formulate a balance between accountability and autonomy and begin to embrace change. Only then will an environment be created that supports leadership development that fosters an organization that can facilitate ongoing new client acquisition and retention in the future.

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

Jan 28, 2026

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Law Firm Leadership – Responsibility of the Partners

Question: 

Our firm is a 14 lawyer firm in St. Louis, Missouri that focuses on small businesses – both transactional and litigation matters. There are eight equity partners, two non-equity partners, and four associates in the firm. We are managed by a three member management committee and a firm administrator.

While we have been successful over the past fifteen years since the formation of the firm, we are experiencing numerous issues including:

1. Defections of partners, associates, and others leaving the firm.
2. Difficulty in finding, hiring, and retaining attorneys and staff.
3. Dissatisfaction by lawyers in the firm concerning the way things are done.
4. Partners and associates are expressing growing dissatisfaction with firm management and policy.
5. Lack of faith in the management committee.
6. Lack of open communication between the management committee and the rest of the firm.
7. Dissatisfaction with the partner and associate compensation system and the belief that it is unfair. The management committee makes all compensation decisions and the factors that are considered are unknown as well as the performance expectations.
8. There is a lack of adequate succession planning for the transfer of client responsibility from senior partners to younger partners.

We would appreciate any suggestions that you might be able to offer.

Response:

I understand your dilemma. You are at a difficult size. It sounds like you are facing many of the problems that firm leaders face at your stage of growth. Your leaders must be willing to:

1. Invite active participation and input from all attorneys concerning matters of firm governance. For example, revitalize the management committee by rotating its membership and limiting tenure and consecutive terms or establish a compensation committee that represents attorneys from all levels of the partnership. Also, give the attorneys a voice in policy determination and other important administrative decisions.
2. Implement a lawyer career advancement program that outlines a program for attorneys to advance from associate to non-equity partner and then to equity partner. A common complaint that we hear from our interviews of associates is lack of feedback on short term performance and what it takes to “make partner” and how they are progressing toward eventual partnership. During a recent interview an associate told me:
   1. I would like to know: What does it take to become a partner – consideration criteria?
   2. What do I have to do?
   3. What is the timeline for consideration?
   4. How am I doing – am I partnership material?
   5. What does partnership mean in this firm? Will I have a voice?
   6. What are the mechanics of admission? (Is there a buy-in)
   7. Is there a buyout for retiring equity partners?
3. Set up a compensation system that attempts to be fair and consistent in rewarding all of the lawyers for their total contribution to the firm. Identity and share the specific factors that are considered if the system is a subjective-based or subjective-objective hybrid system. Develop an incentive system whereby attorneys get credit for client their working attorney fee collections, client origination, including enhancement of present client relationships, management of the firm and its practice areas, training of associates and paralegals, pro bono activities, and other nonbillable activities.
4. Develop a formal evaluation program that will let the attorneys know where they stand and allow qualified associates to progress to partner status. Encourage active participation in pro bono activities, especially ones in which the attorneys have a particular skill or interest.
5. Assign responsibility for client matters at an early stage in an attorney’s career. Introduce attorneys to the clients as early as is practical. This will enable the attorneys to step into the fray from the beginning and be more involved and informed on client matters.
6. Establish an ongoing, organized training program for professional growth. This can be done by setting aside time for attorneys to attend CLE seminars or meetings sponsored by other professional groups. Regularly scheduling in-house training sessions, under the guidance of partners with specialized expertise, would develop the skills required to succeed in various practice areas, including business development and management techniques.
7. Give the attorneys an opportunity to train and supervise other attorneys and paralegals to provide support on specific client projects or in the substantive areas in which the attorneys are involved.
8. Assist attorneys in building their individual reputations through participation in programs sponsored by the bar association or by writing articles on substantive areas of practice for publication in bar association or professional journals. Encourage their participation in programs sponsored by the firm and other associations, such as accounting firms for clients and prospective clients.
9. Provide an ongoing forum for the attorneys to participate in discussions with one another concerning client matters (i.e., strategies), research findings, and input on decisions that may affect matters they are working on. Circulate an agenda before each meeting, and include all partners and associates.
10. Develop a strategic plan that enables partners and associates to determine the firm’s immediate and long-term objectives.
11. Show care and concern for the professional and personal welfare of both partners and associates as well as staff.
12. Encourage the opposing viewpoints and consider other opinions.

Click here for our blog on management

Click here for our blog on governance

Click here for out articles on various management topics

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

 

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