The financial turmoil that law firms, along with the rest of the economy, are experiencing today may lead to a reassessment of the conventional wisdom that every lawyer should want to become a partner. Of course, questions about the wisdom of automatic partnership transcend the current economic scene. Would we advise our clients to move forward with a decision if questions like these were on the table? Is becoming a partner wise...
These questions are daunting enough, but consider the partnership risks in today's economy. Why seek to join a partnership when, irrespective of how low your earnings from the firm may be, you will be jointly and severally liable for the debts of the law firm in the event of the firm's collapse? Then consider the opposite side of the issue. Law firms with profitability problems increasingly move to eliminate ("de-equitize") higher paid partners as they continue to hire new, young, lower paid associates. Each of the laid off partners was (presumably) added to the partnership because the firm had a strategic goal for his or her practice at some point. However, when the overall profitability suffers, the leadership may make a change rather than hold on to partners. I recently spoke with one managing partner who called this process "culling." It also affects lawyers on the low end of the totem pole. Associates are hired out of law school and work for five, six or seven years. Then, if they don't make partner, they're asked to leave to make way for the next group of young "unwashed" law school graduates. Most human beings are optimists (until they conclude otherwise), and I suspect most young associates believe the sacrifices they make early in their careers are worth it because they are convinced they are among the select few who will become partner-right up until the moment that they are shown the door. Achieving partnership in a law firm of course remains a worthy and honorable goal for most lawyers. But it should not be taken as an automatic one. Strive to become partner-but do so with your eyes open.
Ed Poll, J.D., M.B.A., CMC, is a recognized expert in law practice management. He partners with attorneys and law firms to increase profitability, coaching them on issues of internal operations, practice development, & financial matters. Ed enables lawyers to be more effective with their clients with less stress for both the lawyer and the client. He practiced law for 25 years, has coached lawyers for 20 years, and is the author of 13 leading books. His latest book, Growing Your Law Practice Through Tough Times, was released in April 2010. Ed is the recipient of the Lifetime Achievement Award, State Bar of California (LPMT Section).
Ed is a Fellow of the College of Law Practice Management, a board-certified Coach to the Legal Profession and a charter member of the Million Dollar Consulting® Hall of Fame. He can be reached at (800) 837-5880, www.lawbiz.com, www.lawbizblog.com and www.lawbizforum.com.
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