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‘Collegial’ partnerships failing to tackle problem partners

Inadequate performance management putting law firms at risk  

2 April 2014

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By Manju Manglani, Editor (@ManjuManglani)

Law firms are risking partnership disputes by failing to put in place early and appropriate performance management systems for partners, a partnership law specialist has said.

"A partnership is a sort of collegiate institution, therefore people don't like to tackle problem performers because it's difficult," said Mark Briegal, head of partnership law at Aaron & Partners and a former management consultant.

"But, if people aren't performing, you need to tackle it and put in place performance improvement plans in terms of outputs and behaviours."

Common areas in which small to medium-sized UK law firms are failing to manage their partners include recruitment, performance measurement, appraisals and exit processes, said Briegal.

A key part of the problem is a lack of preparation given to associates on the partnership track.

"There's a fundamental structural issue that you get to be a partner in a law firm because you're good at law," said Briegal. "But suddenly you've got to manage a team of people and run a business, and it's a completely different skill set to that which you've been trained to do."

"I think lawyers who come up through the system are all bill, bill, bill, and spending time on managing people is somehow perceived to be a real waste of time."

Another common problem is a lack of alignment between a firm's stated values and the way in which it measures and rewards performance.

"On the one hand, you're saying 'these are our core values, this is what we believe in as a firm, this is what is important to us' - all the good stuff, but then the performance manager is asking 'how much did you bill?'

"This encourages all sorts of appalling behaviours like not referring stuff when you should, inflated billings and nicking other peoples' bills," commented Briegal.

Aside from rewarding desired behaviours, law firms also need to have in place a partnership or LLP agreement that allows for partners' lockstep points to be adjusted based on a range of behavioural indicators, he said.

Failing to do so puts firms at risk of being wound up (at worst) or paying sizeable settlements (at best) if they try to eject underperforming partners without having made adequate provisions for doing so.

"It's a case of looking at what's in the partnership or LLP agreement and, if there's nothing in there, then what's in the Partnership Act and what are the options around it," commented Briegal.

"Sometimes, dare I say it, at the end of three months of working with a client, you know exactly why the others wanted this individual out - because they're a pain - you can see that even as their lawyer! But the firm has not followed the right process."

Many firms continue to eject partners in an inappropriate manner. "I've seen one case where it was just 'we don't like you, get out, we've changed the locks'," commented Briegal.

But, it's not just firms that are behaving badly. "There was one case where somebody was appointed partner in a mid-sized firm and it appears the power went to their head. They had been a perfectly good associate but suddenly became this sort of mad person as a partner, going around upsetting everybody and throwing their weight around!"

He continued: "Most of these things settle because the cost in terms of time, effort and money in running a fully-blown partnership dispute takes your eye off the ball. You're much better off saying 'I want this person out, I'm going to spent some money' and they go."

"But, if you can get this stuff sorted out prior to there being a crisis, life is much easier."






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