What does it take to keep partners motivated to perform at high levels consistently? How does a law firm know when a dip in performance is serious? How is partner performance managed?
Leaving aside health and personal issues, keeping partners motivated takes three things:
Early warning signs
A consistent drop in hours, a shrinking client list, increased turnover of associates, an unwillingness to delegate, slow turnaround times, and low realization rates can all signal the presence of larger performance issues.
Law firm partners are often hesitant to enquire about the health of another partner's practice. Partners often see concern from other partners as unwelcome meddling. The reality is that most partners believe that they have earned the right to fail.
Active planning process
We recommend an active planning process that includes marketing and production goals, associate training and development commitments, a client profitability analysis and process support. While implementing a planning process that all partners in may be difficult initially, the resulting consistency in performance and issue avoidance will be appreciated.
Incentives and consequences
Market-aware firms pay for performance, which rewards partners for the profits they contribute over a period. Depending upon a firm's economic model and philosophy, the proximity of the rewards and consequences may be in the same year or may be over a multi-year period. Law firms that have a stable base of compensation that is not tied directly to economic performance run the risk enabling weak partner performance.
We recommend quality reporting systems that indicate potential performance issues early together with an active planning process and near-term rewards and consequences.
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