I am a partner in a four attorney law firm in a small town south of Waco, Texas. We have two partners and two associates. Our practice is limited to elder law, estate planning, and estate administration. The practice was formed thirty years ago by the two partners. The firm has built a strong brand in elder law and estate planning/administration and does a significant amount of business in several other counties. The firm is doing well financially. Our main problem is that we are overwhelmed with work and we need to hire an additional attorney. We have interviewed an attorney that is a partner in another two attorney law firm in the area that has some limited experience in small business corporate work and estate planning. However, most of his experience is in personal injury plaintiff, criminal, and family law. If he joins our firm he wants to continue to develop these practice areas as well as bring his personal injury, criminal, and family law cases with him. Bringing him on board could solve our lawyer staffing issue as well as increase our business. Should we bring him on board?
It sounds like the attorney you are considering is a trial lawyer and has limited experience in your practice areas and he wants to expand his personal injury, criminal, and family law practice. You need help in your core practice areas.
This would cause your firm to become more of a general practice firm rather than the specialty firm that you are presently. While there are general practice firms that handle elder law and estate planning/administration, more of the successful firms your size are specializing in these practice areas. Bringing these practice areas into your firm would totally change the firm’s brand, image, culture, and strategy. Marketing will be more complex. The firm will have to fund client advances for the personal injury cases. You need to revisit your strategy and ask whether you want to go this direction. Personally, I think you should pass. If you want to expand into other practice areas you might consider real estate and corporate. I have several elder law/estate planning firms that handle real estate and corporate work.
I would cast a wider net and look for additional candidates. I would start by looking for an experienced elder law/estate planning attorney. However, these attorneys are hard to find. You might have to hire and train a recent law school graduate.
John W. Olmstead, MBA, Ph.D, CMC
I am a member of a three member management committee of a 16 lawyer firm located in Akron, Ohio. We have 10 partners and 6 associates. Several of our partners are in their 50s and 60s. Recently, we have had discussions with a couple of potential merger partners and laterals and in all cases they have backed out advising us that they were uncomfortable with our balance sheet. What can we do to better position ourselves. We desperately need to bring in new talent with books of business?
First there are the obvious balance sheet items – bank debt, large tapped out credit lines, equipment leases and other liabilities. Then there are the items that are not recorded on the balance sheet – namely unfunded partner retirement buyouts and long term real estate leases. These are often major deal breakers in mergers and scare away laterals. If you have bank and other debt on the balance sheet work at cleaning it up. More importantly if you have unfunded partner buyouts begin either rethinking the desirability of these programs or begin funding this liability now with a goal of the liability being totally funded over the next five to seven years. Then shift to a retirement program that is totally funded. Unfunded partner retirement programs are becoming a thing of the past.
John W. Olmstead, MBA, Ph.D, CMC