Partners can go through waves of productive and not-so-productive periods. But what should a firm do about those partners who cannot seem to dig out of an unproductive slump — or even worse, do not seem to want to? While it is not the type of situation any managing partner wants to confront, this article looks at why tackling the issue head-on is the best course of action.
HOW DO YOU DEFINE PERFORMANCE?
The definition of underperformance depends, in large part, on your firm's documented goals along with unwritten expectations, its criteria for evaluating performance and the terms of your partnership agreement. Increasingly, in some firms, senior partners are being labeled as underperformers not because their contributions have changed, but because their firms and the legal marketplace have changed their standards.
To prove underperformance, your firm first needs to define it. In general, underperforming partners:
- Regularly bill fewer hours than their peers;
- Fail to develop a self-sustaining practice, which includes introducing new clients and engagements to the firm;
- Are unable to manage engagements and projects profitably or to the client's satisfaction;
- Do not adhere to the firm's recommendations for best practices, let alone policies for standard operating procedures, for client, staff and internal administrative matters; and
- Cannot (or will not) adapt to a more competitive and demanding legal marketplace, to your firm's changing values and objectives or even to new technologies.
Underperformers also show signs of burnout, exhaustion, anxiety or boredom. Note that unethical behavior or misconduct generally are not considered performance issues. You should address such situations separately.
WHAT IS THE COST?
It is common for firms to ignore struggling partners, hoping they will find their own way back to productivity — or leave the firm. Neither scenario is likely. Most underperformers realize their shortcomings but do not know how to fix them. And few people willingly leave a secure job, even one that offers increasingly diminished returns.
In the meantime, underperformers cost your firm in the form of lost work, weakened client confidence and lower staff morale. The partner may even stand in the way of a deserving associate's promotion, recruitment or practice development opportunities, or a successful merger with another firm.
Try to quantify these costs and present them, as well as other "objective" evidence such as average profit per partner, to the underperforming attorney during his or her compensation review or in a more informal interim one-on-one meeting. Do not blame or accuse the partner, but instead, express concern and ask how you, other partners and the firm can help get him or her.
CAN CHANGES BE MADE?
If you believe rehabilitation is possible and the underperforming partner is willing to accept help, develop a performance management plan. Start by setting specific and measurable goals and objectives, such as increasing billable hours by a set percentage or engaging a specific number of new clients in the next year. Then provide the partner with the support he or she needs to achieve them.
Support can include mentoring by your firm's top rainmaker, continuing legal education, networking, financial management or computer courses. Consider a personal organization or career coach, additional administrative help, or if the issue is burnout, a vacation or a short sabbatical. Meet regularly with the partner to assess progress and discuss possible obstacles. Try to be flexible and patient as you mentor an underperforming partner.
WHEN IS IT TIME TO LEAVE?
It is important to know when to cut your losses. Not every underperforming partner is capable of — or interested in — making necessary changes. If the partner exhibits little progress or commitment to change after a predetermined period, it is probably time to change the partner's role or to part ways from the firm. In such situations, make sure the partner's transition is handled sensitively.
Passive techniques, such as reducing partners' shares until they are forced to quit, can be as detrimental as aggressive ones, such as terminating them on short notice. Both can damage firm morale and your reputation with clients, staff and prospective hires. Also, unless partners are guilty of misconduct, you owe formerly trusted colleagues courtesy and respect.
Terminating a partner is a tough decision, but it is in your firm's best interest to move forward with productive partners. Taking action sooner rather than later will result in less damage to your firm's profitability, morale and relationships.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.