Do partner reviews, reward discussions and decisions fill you with dread?

In the third and final of my short posts designed to help leadership teams improve process and outcomes, I provide some tips on how to approach evaluating “broader” partner contributions. Those “hard to measure” contributions that fall outside short-term client service commitments and don’t show up in your financial reporting, but which have a profound effect on long-term and sustained business success.

“If we value the present much more than the future, then we’re less likely to make the necessary investments today to reduce risk tomorrow.”

In his 2020 Reith lectures* Dr Mark Carney distinguishes between: (1) the short-term focus and commitment to client service and relationships that are critical to a businesses’ current fortunes, and that tend to be the driver of individually focused remuneration models; and (2) the sort of contributions that amount to “investments in long-term business success”.

As a leader at your firm, you recognise your partners’ laser-like focus on short-term client service and relationships remain critical to your fortunes. You also agree with Mark Carney that the “broader” contributions they make are fundamental to the sustained long-term success of your business.

But you have a problem. At your firm, in common with many others, “broader” contributions are given little, or no, actual recognition or value when assessing partner performance or setting remuneration. As a result, you struggle to get partners to focus on and deliver these meaningful broader contributions to the extent you’d like them to.

To ensure the sustained and stable success of your firm, you want to change this state of affairs. You want to direct at least some of your partners’ focus towards broader business critical tasks and initiatives, as well as to client service and relationships. So, here are some tips to help you do just that.

THE TIPS:

Define it – Define what you want partners to contribute in each of these broader contribution areas. Make sure the descriptions support your strategic aims and reinforce positive cultural alignment. For example, by setting out the type of collaborative intent and action you expect partners to demonstrate. Typical areas of broader contribution might encompass: People & Talent , Risk & Ethics, Firm Leadership & Culture, Technical Excellence & Knowledge Sharing.

Get your partners to help you with the definitions – they’re good at this. Ask them to describe what the best partners in a given area do and how they do it. Also ask them what they’d expect a baseline level of partner contribution to look like. Then fill in the gaps.

Value it – As noted in an earlier blog, give an explicit value to each area of broader contribution. This helps indicate where, and to what extent, you expect partners to direct their focus, time and energy and it ensures that contributions in “broader” areas have evaluatory and remuneration consequence. It also means that you are making good on any assertions that your culture ensures that client-facing financials are not the only thing that matters at your firm.

Evidence it – Go looking for, and start to build, a data set that can act as supporting evidence that your partners can use to demonstrate what they have been delivering. The data is out there and it doesn’t take long to identify it – but it’s not just sat in your Practice Management (Financial) System. So go looking in your HR System, Client Contact System, Document and KM Systems, telephone and email records, risk register and management reports. But also ensure the data you use links to the definitions of expected contribution you have put in place (see 1. above) and not just what is easy to collect.

Contextualise it – Take input from your subject matter experts – Chiefs of Finance, HR, BD, IT, KM, Risk. They have a wealth of experience and in depth knowledge of partner behaviours – good and bad. Have them curate, interpret, contextualise and report against the supporting evidence data set you’ve built. But take care to ensure the their input is provided on a structured, well understood and consistent basis, otherwise their input and the data will be easily undermined.

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*The Reith Lectures 2020: How We Get What We Value – From Moral to Market Sentiments

In the second of our series of news alerts focused on key regulatory trends of which firms and solicitors need to be aware in 2022, our regulatory and professional discipline partner, Andrew Pavlovic, considers the SRA’s treatment of junior solicitors and how their shift may now be focussing on cultural issues at law firms.

There has been growing disquiet in the legal profession about the SRA’s treatment of junior solicitors who commit acts of dishonesty in circumstances where they are under considerable workplace pressure and/or are suffering from mental ill-health.  However, the position established by case law remains that, to preserve the standing of the profession, solicitors found to have acted dishonestly will be struck off the roll of solicitors unless there are exceptional circumstances as to why this should not be the case.

Read the full article here

 

In this series of news alerts, CM Murray LLP regulatory and professional discipline partner, Andrew Pavlovic, identifies three key regulatory trends which firms and solicitors need to be aware of in 2022.  In this first alert, Andrew considers the extent to which the SRA is continuing to investigate personal misconduct following the High Court Judgment in Beckwith at the end of 2020.

The decision of the High Court in Beckwith was widely seen as a warning to the SRA against encroaching into solicitors’ private lives, and investigating conduct which does not touch on a solicitor’s practice or the standing of the profession….Read more

Law firm leaders and advisers please read Alys Carlton‘s recent LinkedIn post. It is spot on.

Delivering effective performance in “big jobs” within a fulfilled life needs focus and determination.

Determination to actually to do less of something, to allow others to grow, and for you to find the head-space, time and energy to devote to where you know it is best spent.

The same for business and personal life – and the huge fuzzy area where they overlap.

Of course – this is easy to say and hard to do. See David Maister , “Strategy and the Fat Smoker” for the business context. And maybe even get some help from Alys ?

In this alert, Associate Pooja Dasgupta and Partners Zulon Begum and Clare Murray summarise three of the most notable and interesting Partnership and LLP law cases heard by the UK courts in 2021, with some practical commentary on how they might affect LLPs and partnerships, and their members and partners.

3 of the Must-Know Partnership Law Cases of 2021

 

If yes, it’s well worth reading this important Cat Rutter Pooley piece along with the John Gapper article she links to. My view below.

• 𝙇𝙤𝙘𝙠-𝙨𝙩𝙚𝙥 𝙩𝙝𝙧𝙞𝙫𝙚𝙨 – where partner contributions (time, profit, leadership …) do not vary too much and rewards are at the top end of their markets. See Slaughter and May and others with tight client and work-type focus and narrow geographic footprints. Clients also get great service from leading industry/sector experts that are totally client focused.
• 𝙇𝙤𝙘𝙠-𝙨𝙩𝙚𝙥 𝙘𝙖𝙣 𝙨𝙪𝙧𝙫𝙞𝙫𝙚 – as a profit allocation system – when contributions are varied but little top-end market competition for firm’s most productive partners. See the Magic Circle in 1990s and early 2000s, pre-PE boom taking firm hold.
• 𝙇𝙤𝙘𝙠-𝙨𝙩𝙚𝙥 𝙘𝙖𝙣𝙣𝙤𝙩 𝙨𝙪𝙧𝙫𝙞𝙫𝙚 – in its pure form – in a market where variable contribution and high levels of poaching pressure on firms’ most productive partners co-exist. The PE pressure-cooker.

𝙎𝙤𝙡𝙪𝙩𝙞𝙤𝙣 – for most firms – a well calibrated, clear and consistent, contribution based partner profit allocation system. But without, necessarily, throwing out all aspects of tenure based reward with the pure “profit productivity” bath-water.

𝙁𝙪𝙧𝙩𝙝𝙚𝙧 𝙧𝙚𝙖𝙙𝙞𝙣𝙜 – John Stacy Adams’ equity theory.
𝙁𝙪𝙧𝙩𝙝𝙚𝙧 𝙩𝙝𝙞𝙣𝙠𝙞𝙣𝙜 – the difference between the partnership business model and the way partnerships distribute profits?

The recent decision of the Solicitors Disciplinary Tribunal to dismiss a claim for costs by a successful respondent has sparked a renewed discussion as to whether the ‘starting point’ that the SRA should not be ordered to pay the costs of a failed prosecution remains justifiable.

In this news alert,  CM Murray’s new SRA Professional Discipline partner Andrew Pavlovic, provides further insight on this issue, following on from his recent comments in The Law Society Gazette:

Costs in the Solicitors Disciplinary Tribunal – Time for a Rethink?

This is the most wonderful and inspiring discussion on the UN International Day of Persons with Disabilities: ‘BUILDING BACK BETTER’. Our fabulous Senior Associate Wonu Sanda, and Partner Emma Bartlett are joined on this podcast by the brilliant and inspirational Husnara Begum, a former City corporate lawyer turned leading career management specialist and skills trainer, who is an incredible and tenacious advocate for all forms of diversity and inclusion.

Drawing on Husnara Begum’s personal insights on the impact of her own disability and her experiences in the legal profession (including some very positive examples of best practice that she experienced), this podcast explores how employers, business leaders, and senior managers can better recruit, support, and promote people with disabilities in the workplace. I hope you enjoy it as much as I did:

The UN International Day of Persons with Disabilities: ‘Building Back Better’ Podcast

CM Murray LLP is delighted to share the second in their Law Firm Founder Conversations podcast series, in which Managing Partner Clare Murray discusses all things Law Firm Founder with Joydeep Hor, Founder and Managing Principal of leading Australian employment law firm and management consulting business, People + Culture Strategies (PCS).

PCS is a trusted adviser to Australian and international employers of all sizes and across all industries, advising on employment law as well as HR strategy and training on workplace issues.

Listen to the podcast here

As a graduate of the Harvard Owner President Management Program, Joydeep Hor of PCS is a deep thinker on business issues affecting law firm founders. In this podcast, Clare and Joydeep explore a wide range of strategic issues, practical experiences and personal challenges and highlights in setting up and building a thriving law firm from the ground up, including:

  • What are the qualities and skills that make for a successful law firm founder? (@1:13 mins)
  • Leadership as a founder: Balancing the challenges and opportunities of being the founder as well as a leader (@5:05 mins)
  • How to fail: Learning to embrace your mistakes and recover from them (11:58 mins)
  • The quest for maturity as a founder and business owner over the years (15:20 mins)
  • What to consider when contemplating office expansion, both domestically and internationally, and the importance of founder brand when establishing a new office (17:00 mins)
  • Do business management programmes make a difference when setting up and growing your law firm? (20:30 mins)
  • The challenges for law firm founders of balancing working ‘in the business’ vs ‘on the business’ (23:55 mins)
  • How to encourage lawyers from under-represented backgrounds to set up their own law firms (29:30 mins)
  • Financial prudence and the misperceptions around funding a start-up firm (32:40 mins)
  • It’s good to talk: The vital importance of sharing experiences, issues and strategy with other founders (34:50 mins)
  • Creating a legacy: An unnecessary added burden for founders? (37:30 mins)

We hope you enjoy listening to this episode. Please do like, subscribe and share. You can listen to the previous episode of the series, with Laura Devine, Founder and Managing Partner of leading UK and US immigration law firm, Laura Devine Immigrationhere.

If you are thinking of setting up a new law firm, or are expanding to take your firm’s growth to the next level, and would like to discuss any related partnership or employment law infrastructure issues with us, please do get in touch with Clare Murray.

We are delighted to share with you the recording of our recent Professional Practices Alliance (PPA) webinar on ‘What might the Future hold for Law and other Professional Services Firms?’, in which our expert guest speakers from the Law Society of England and Wales (LSE&W) discuss the future of Law and Professional Services firms based on the findings of their recent research into changes and uncertainties in the legal profession in England and Wales over the next 30 years, through the lens of global trade and competition.

In this webinar, you can hear Chair, Rob Millard, Director of the Cambridge Strategy Group and speakers, Dr Tara Chittenden and Dr Kion Ahadi, of the Law Society of England and Wales, discuss issues including the following:

  • How potential future change will have an impact on diversity and inclusion, particularly in more senior positions;
  • How Generation Z have begun to reshape global politics as we see a generational shift in allegiance and identity;
  • Whether the rise of machines will free up time vs threaten jobs; and
  • How, according to research carried out by LSE&W, it is expected that, by 2030, the workforce in the legal sector, including lawyers and legal support staff, will reduce by half.

Listen to the webinar here