Law Practice Management Asked and Answered Blog

Category: Are

May 15, 2019


Challenges in Law Firms that are Family Businesses

Question: 

I am a partner in a husband/wife owned law firm in Seattle, Washington. We have four other associate lawyers in the firm. One of these lawyers is our son and the other is the daughter of my wife’s (who is my partner) brother. We have four staff members of which one is also a family member. We are a general practice firm and we have been in operation for ten years. While the firm has done well over the years we have had our challenges. Office problems seen to follow us home and both staff employees and non-family attorneys are alienated. We have been experiencing turnover of both staff and attorneys. What should we being doing different?

Response: 

I have seen family practices go both ways – successful and not so successful due to the conflict and drama that can exit in family practices if they are not setup and managed properly.  A few of the challenges and issues that can arise in family owned law firms include:

Family practices must first start by recognizing that there are three social systems at play – the family, the law firm business, and overlap of the two. Unless boundaries and rules are established there will be conflict and tension. Family roles and roles in the law firm should be be developed. Here are a few guidelines that family practices should consider adopting:

  1. Develop family and law firm charters – sort of like job descriptions – that outlines roles and responsibilities in the family and the law firm.
  2. Establish criteria for who in the family can join the firm.
  3. Determine education and experience requirements for joining the firm.
  4. Determine how titles of family members in the law firm will be determined.
  5. Determine how job performance will be evaluated.
  6. Determine consequences for inadequate performance.
  7. Determine how compensation will be determined.
  8. Leave law firm business at the law firm – don’t bring it home.

Here is a link to an earlier blog in re children of partners who are attorneys working in law firms.

Click here for our blog on human resources

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

 

Mar 26, 2019


Hiring Lawyers that are Children of Law Firm Partners

Question: 

I am an associate attorney in a nine-attorney firm in Orlando, Florida. There are five partners and four associates in the firm. I have been with the firm four years and I am the senior associate. I am concerned about my future. Recently one of the partners announced that he was bring his son, who recently graduated from law school, into the firm as an associate. Other partners have children in law school. I am concerned about my future. I have hopes of becoming a partner in the firm in the next few years. I am afraid that with partner children in the firm this may not happen. What are your thoughts on this matter?

Response: 

Many firms have brought children and other family members into the firm and have had excellent results. Others have not. In general, I believe that law firms do a better job at this than do other business firms.  I believe that if the firm lays the proper foundation and goes about it correctly children of partners and existing associates can coexist. Here are suggestions that I suggest for law firms:

  1. Recognize that for the family members there will be a family system, law firm, and an overlapping of these systems. This can be fertile ground for conflict if clear boundaries between the family role and the firm (business) role are not clear. Establish clear boundaries. Family dynamics and business dynamics seldom mix. A firm’s objective should be to draw the clearest possible distinction between the two and make sure that everyone understands that the firm (business) is the firm and the family is the family.
  2. Children should not be brought into the firm unless they want to be involved and satisfy the firm’s  standard hiring criteria for lawyers. I believe that before partners children join the law firm it is a good idea for them to work for another firm or organization. When they do join the firm, they can bring with them that experience, a supply of new ideas, a network of contacts, and a number of other benefits acquired.
  3. The firm must make it clear to partner’s children that they must “earn their stripes” and come up through the ranks in the same fashion as other associates in the firm. No special privileges. Make it clear that they must earn the respect of other attorneys and staff in the firm.
  4. The firm should put the associates and staff at ease. Make it clear that children of partners are expected to “earn their stripes” and they will not be promoted to partner over other associates on family status alone.
  5. The firm should clearly define the role of all parties.
  6. The partners should monitor their own behavior. They should not take sides – either between their children if they join the firm or between other partner’s children and other employees in the firm.
  7. The firm should be careful with compensation and other rewards. Compensation should be based on performance and results and consistent and competitive with other law firms of similar size and type.
  8. Communicate, communicate, communicate – your intentions, roles, etc. before and after partner’s children join the firm.

Click here for our blog on human resources

Click here for articles on other topics

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

Mar 10, 2017


Law Firm Merger – Are We a Suitable Candidate

Question: 

Our firm is a two partner firm in Columbus, Ohio. We have two staff members. There are no other attorneys in the firm. We have been in practice together for seventeen years. I am sixty two and my partner is in his fifties. My practice is limited to intellectual property and my partner’s practice is limited to medical malpractice defense. Recently, as a result of lack of coverage, our unwillingness to hire associate attorneys, and our frustrations with dealing with management issues we have decided that we would like to merge with a larger firm. However, we are concerned that our numbers may not be satisfactory. Our five year averages are as follows:

Since we split the pot evenly we each made $130,000 on average.

With these numbers are we a suitable candidate or are we just whistling in the wind? We would appreciate your thoughts.

Response: 

Obviously these are not great numbers. Depending on firm size and type of practice – most firms (small firms) are looking for revenue per lawyer in the range of $360,000 and up. Many firms are looking for books of business that will keep the candidate and an associate busy – $750,000 plus.

However, law firms are also looking for new sources of business (clients) and lawyer talent. There are firms out there that have the work and need help with the work and might be interested in your talent and skills as well as the clients that you could bring in. You may not be able to join the firm as an equity partner but may be able to join as a non-equity partner. (Depends on firm size) Due to the very different practice areas that each of you have you may not find opportunities in the same firm.

I encourage you to look around, start your search, and see what happens.

I have seen many situations similar to yours that have resulted in successful mergers and lateral or Of Counsel positions.

Click here for our blog on mergers

Click here for our article on mergers

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

 

Feb 09, 2016


Law Firm Marketing Director – Are We Ready For One – What Should we Look For?

Question:

We are a 25 lawyer insurance defense firm in Northwest Dallas. We are managed by a managing partner, firm administrator, and director of human resources. We have been discussing the need for a marketing director. Are we too small? If we decide to hire one what should we be looking for and where should we start our search?

Response:

There is no magic size. I have seen five lawyer firms effectively use a marketing director and thirty lawyer firms that do not have one. It all comes down to your firm's specific need, what you are wanting to accomplish, and what the lawyers are willing to let a marketing director do.

While the popular title is marketing director, director of client and business development, etc. some marketing staff in smaller firms often function more as marketing coordinators and event planners. If you are looking for someone to help the firm devise a competitive strategy, lead the firm's strategic planning effort, help diversify the practice, etc., you need to look for an experienced marketing director with five plus year's experience in law or other professional service firm marketing at a director level.

If you need someone to update the website, write bios, write blogs, update social media, create brochures, and plan and coordinate events – you may only need a marketing manager or coordinator with excellent writing skills. Prior experience in law or professional service firm marketing is a plus but not required. Journalism and mass communications are popular degrees for this position.

The Legal Marketing Association (LMA) is an excellent source for finding candidates. Here is a link to the LMA job bank

Click here for our blog on marketing 

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

 

 

Jan 20, 2015


Law Firm Hiring Practices – Pros and Cons of Hiring Lawyers that are Children of Firm Partners

Question:

I am a partner in a four partner firm located in Houston. We have three associates in the firm. One of our partners has a son just finishing law school and he would like him to join the firm. We have never had children of partners work in the firm before and I am concerned about setting a precedent. We have a good relationship among all of the attorneys and I do not want to see our relationship tarnished. I would appreciate your thoughts.

Response:

I have seen it go both ways. Many firms have brought children and other family members into the firm and have had excellent results. Others have not. In general I believe that law firms do a better job at this than do other business firms. Your situation is more complicated since you have associates in place that may feel threatened and uncertain as to their futures when you bring in family members. I believe that if you lay the proper foundation and go about it correctly you can successfully bring your children into the firm. Here are a few ideas:

  1. Recognize that for the family members there will be a family system, the family law firm, and an overlapping of these systems. This can be fertile ground for conflict if clear boundaries between the family role and the firm (business) role are not clear. Establish clear boundaries. Family dynamics and business dynamics seldom mix. Your objective should be to draw the clearest possible distinction between the two and make sure that everyone understands that the firm (business) is the firm and the family is the family.
  2. Children should not be brought into the firm unless they want to be involved and satisfy your standard hiring criteria for lawyers. I believe that before your children join the family law firm it is a good idea for them to work for another firm or organization. When they do join the family firm they can bring with them that experience, a supply of new ideas, a network of contacts, and a number of other benefits acquired.
  3. Make it clear to your children that they must "earn their stripes" and come up through the ranks in the same fashion as other associates in the firm. No special privileges. Make it clear that they must earn the respect of other attorneys and staff in the firm.
  4. Put your associates and staff at ease. Make it clear that your children are expected to "earn their stripes" and they will not be promoted to partner over other associates on family status alone. (Unless this is your intent)
  5. Clearly define the role of all parties.
  6. Monitor your own behavior. Don't take sides – either between your children if both join the firm or between your children and other employees in the firm.
  7. Be careful with compensation and other rewards. Compensation should be based up performance and results and consistent and competitive with other law firms of similar size and type.
  8. Communicate, communicate, communicate – your intentions, roles, etc. before and after your children join the firm.

Click here for other articles

Click here for my blog on HR Matters

Good luck! 

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

Jul 22, 2014


Law Firm Attorney Retirement – How Law Firms Are Coping With Aging Attorneys

Question:

I am the Director of Administrator in a 45 attorney law firm in Miami. Twenty of these attorneys are partners and ten of the partners are in their late fifties and mid to late sixties. While we have a semi-retirement program in place it is not mandatory and many of our senior attorneys are unwilling to address issues pertaining to succession and transition of their practices. Do you have any thoughts or ideas you can share regarding creating incentives for senior attorneys to address and deal with the issue of retirement?

Response:

Larger law firms are moving away from mandatory retirement. However, many large law firms still have mandatory retirement. According to a recent survey approximately 57% of law firms with over 100 attorneys have mandatory retirement programs. At the other end of the spectrum many smaller firms that never had mandatory retirement are beginning to incorporate some form of mandatory retirement in their agreements. In firms of all sizes and whether they have mandatory retirement programs or not – getting senior attorneys to deal and cope with aging is a challenge. Here are a few thoughts:

  1. Begin planting seeds to get senior attorneys thinking about retirement and the next stage of their lives.
  2. Conduct educational programs designed to help senior attorneys visualize their retirement years.
  3. Help provide senior attorneys with a reason to want to retire.
  4. Provide career life coaching services to senior attorneys and help them develop other interests and hobbies.
  5. Help senior attorneys develop individualized retirement/succession plans.
  6. Provide financial incentives to those that retire by say age 70 in payout agreements.
  7. Implement phased retirement/wind-down options/approaches.
  8. Consider optional roles in the firm for senior attorneys after they retire and surrender their equity interests.
  9. Insure that the firm has in place competency/peer reviews for all attorneys including senior partners and Of Counsel attorneys.
  10. Insure that the firm has a program that effectively deals with underperforming attorneys.

Aging is a difficult time for all of us and it is normal not to want to think about age related issues much less to begin planning. Your role will be to help senior attorneys take baby steps and come to terms with aging in general.

Click here for our blog on succession

Click here for out articles on various management topics

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

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