A Difficult Partner
by Joel A. Rose
Calls for Tact and Action
In a law firm, the actions and behavior of an individual partner have an impact on all of the other attorneys and administrative support staff. Problems frequently surface after the firm has experienced financial difficulties or its ability to serve clients in a high-quality, timely and profitable manner has diminished. Other lawyers may become increasingly disgruntled with the difficult partner as the problems continue to occur, thereby further exacerbating the situation.
To keep an isolated incident from becoming a major ongoing problem, the firm must heed the early warnings indicated by circumstances that are not too difficult to recognize. A partner may work too few hours; fail to produce adequate revenue; hoard work; fail to follow-up or provide adequate direction to other attorneys or staff; threaten to leave if things aren't done "my way;" accept work that does not generate adequate revenue; devote a disproportionate amount of time to pro bono, bar association or personal business activities, etc.
The firm that ignores these early warning signs in the expectation that the situation will work itself out and disappear is merely compounding the problem. Inattention to these warning signs by lawyer management will be viewed by other attorneys and members of the administrative support staff as a tacit endorsement of the undesirable behavior.
It has been the author's experience that internal interpersonal problems among partners will invariably become external problems, unless the situation is recognized and steps are taken to resolve the issues at an early stage. Conversely, external problems are bound to become internal problems.
A law firm's form of governance frequently dictates the kind of approach selected for dealing with a difficult partner. The partners' attitude toward office management and the lawyers who manage the office is a key factor in determining how to deal with the situation. Is management something that lawyers do only when they have the time - in opposition to the "real work" that lawyers are supposed to be doing? Has the management function been defined?
Firms with a strong central management - such as a dominant managing partner or CEO-type, or a committee system based upon representative governance - usually are better able to address problems and take action. In offices organized as a democracy, no individual or group may be willing to assume authority to deal with these problems since that type of action may be viewed as disturbing the "congenial and collegial relationship between the attorneys." In the latter situation, partners may never "make the time" to confront the difficult partner. In the former instance, the managing partner, a committee or others may be designated to address the issue of the problem partner.
If the partners want the firm to function as a unified entity and not as a confederation of individual profit centers who are conveniently sharing space and the administrative staff, they must be willing to acknowledge and accept and agree to: a form of governance; the role, authority and responsibility of the lawyer managers; and the minimum criteria or conditions of partner performance, the professional and economic objectives of the office can be administered with a minimum amount of tension, and problem partners may be dealt with in a more objective atmosphere.
Objectives and Standards
Partners in a well-managed law firm recognize the need to establish objectives and standards at the beginning of their relationship.
Attorneys who practice law in a partnership or professional corporation are dependent upon the professional abilities of their partners, the personal character of each, and the ability of each of work as a member of a team. Central to this form of organization is a written agreement defining the obligations and responsibilities of attorneys who join together to practice law.
Having a written agreement is especially important, since with the passage of time the partners' interests may change. One lawyer may prefer to devote more time to the social activities associated with generating business rather than being in the office. Others may place certain of their personal investments and other entrepreneurial activities ahead of the office. Others may reduce their active involvement in firm activities, even though they want to be compensated at a high level.
These obligations and responsibilities should go beyond maintaining professional accreditation and conforming to the canon of ethics. Rather, they should extend to a written commitment by each of the attorneys to devote their "best effort" or an agreed upon amount of time, including such activities as production of work, practice development, office approved pro bono service, office management and administration.
One method of building in controls for preservation of quality in performance and service is the use of the peer review evaluation process. From the firm's standpoint, the basic purposes for this type of review are to improve the effectiveness of the attorneys' performances in their current positions, aid the administration and further development of their careers, and alert management to potential problem areas at the earliest stage.
Many functions that partners perform in the law office may be enhanced by the effective application of annual standardized peer review. This process involves evaluating the attorney against a set of predetermined standards of measurement. These standards may combine qualitative, quantitative, relative and purely judgmental factors that relate to the lawyer's performance.
A word of caution: When deciding whether to establish a formal peer review evaluation program, the firm must bear in mind that the benefits of this process are not yielded by the mere existence of the process. The benefits will only become apparent when the procedure is administered with consistency and fairness.
Some firms have made arrangements with psychologists, psychiatrists or other professionals to provide partners with counseling for personal and firm related problems. The partners avail themselves of these services in strictest confidence. These professionals bill the law office, on a monthly or quarterly retainer basis, without identifying the partner(s) obtaining treatment.
Some firms assign the task of counseling the problem partner to the managing partner or the executive committee. A few offices may appoint a special committee. Still others retain a management consultant who is experienced with the dynamics and operations of law office partnerships. The consultant studies the firm, identifies the problems, facilitates discussions of the issues and recommends possible solutions. Depending on the nature of the problem, these recommendations may include changes in office governance, management of practice areas, office operations, compensation or the retaining of other professional assistance.
If a difficult partner is unwilling or unable to acknowledge the problem, then the counseling partner may have to recommend more stringent action.
Of Counsel Status
Some firms are considering "de-equitizing" by redeeming the equity of a difficult partner. In addition to fees based on unbilled work and uncollected or undistributed income, the partner would continue to receive a guaranteed salary but might not receive the other allocations that active partners are entitled to receive. This is usually an extremely delicate matter and must be supported until the client becomes a client of the office itself.
Early retirement: If the partner is eligible for early retirement and elects to exercise this option, then he or she should have the right to withdraw from the office after providing a certain amount of notice.
Expulsion: Most partnership agreements with an expulsion provision enumerate such offenses as violation of ethics or professional misconduct, actions that harm the office and its reputation, serious financial difficulties with creditors, infraction of provisions of the office's articles and other violations as reasons for dismissal.
Reduced draws: Where a partner has an adequate volume of available client work but has not performed at the expected level, the office may be required to reduce that person's draw accordingly. In many offices, the solution is to keep the problem partner's income at a constant level while the percentage or points assigned to other partners increases.
Reassignment of responsibilities: Where improvement does not occur, offices also have reassigned a problem partner's client and billing responsibilities because of the failure to satisfy the firm's performance standards.
Extended outside treatment: Where the problem partner requires hospitalization or extended outside treatment, it is not uncommon for offices to grant an unpaid leave of absence. Upon the partner's return to the office, the managing partner or executive committee, in conjunction with the problem partner, may determine an appropriate work schedule and basis for compensation. Some offices have agreed to compensate the partner at a set figure based on a prearranged number of work hours and specified duties. If the partner satisfies these obligations, he may be eligible to return to his former status with the other partners' approval.
Action is Essential
Most law firms have learned that "benign neglect" works both ways. Partners are less willing to tolerate the problems created by others, particularly when their livelihood is at stake. The difficult partner soon learns that tradition, established hierarchy and age are no longer the shields they once were, especially when performance or lack thereof results in a stabilized or declining level of business.
Firms must be prepared to cope with the difficult partner in a straightforward fashion, to remedy the situation and make it clear that lawyer management is not willing to sit by and let the difficult partner take advantage of the firm or others.
©1999-2015 Joel A. Rose & Associates