Formulating a Management Plan for Your Firm's Successby Joel A. Rose
In theory, all partners are created equal, since, by dint of partnership status, they are accorded the same rights and privileges. In practice, however, this is simply not the case, since individual partners invariably have their own ideas about how to perform their jobs and exercise their authority.
Good law firm management cannot be achieved until all partners agree to subordinate some degree of independence to a managing partner or committee. In essence, the partners must strike a balance between their rights as owners and their responsibilities as citizens of the firm.
If a firm is to establish a form of governance that satisfies all its members, the lawyers must first acknowledge the need for leadership. The designated leader — whether an individual or a management or executive committee — will not succeed unless and until all the firm's lawyers recognize that their willingness to be governed provides the impetus for successful management. The partners also must recognize that management of a firm, either as the managing partner or a member of a committee, is just as important and as difficult as performing client work.
In some firms, one partner assumes the leadership role naturally, either because the individual is a founding partner or controls a significant client base. In firms where the partners are relatively young and inexperienced, however, this process of "natural selection" may be more difficult (if not impossible). In firms where no partner surfaces as a natural leader or no one wants the job, the firm must take aggressive action if it wishes to grow and satisfy its members' professional, economic and personal objectives.
The firm must make some hard and fast decisions about the kind of leadership that is required and what the members are willing to live with. Should a managing partner be elected by the general partnership? Or should this individual be appointed by the management committee?
Sometimes the firm's size will preclude this particular dilemma. The smaller firm is in a position to establish a democratic form of governance that includes all the partners in a leadership role. But when this is not practical, the partners face a difficult choice and risk setting up two power centers — and consequent divisiveness — if the general partnership elects both the management committee and the managing partner. To avoid this debacle, the preferable course is for the management committee to select the managing partner. Once again, the firm is given the chance to chart its own destiny.
Selecting a Firm Leader
What kind of person makes a good managing partner? Generally, lawyers are not recruited to a firm on the basis of their interest or skills in management. And more often than not, the firm doesn't train them in these skills. Consequently, lawyers' skills and interest in management vary greatly.
As a result, the composition of any management committee will consist of lawyers who are good managers and those who are not. This should not be viewed as an obstacle. As relevant as these skills are when selecting a lawyer to serve on the management committee, they are not necessarily the only factors to be considered. For example, it may be equally important, or perhaps more so, to provide equitable representation on the committee to all the different groups of lawyers that comprise the firm.
When it comes to the managing partner, the firm should sidestep the temptation to resolve the enigma of leadership by acknowledging some basics concerning the issue. The requisites for leadership are, in this day and age, well known: A leader must garner respect and support, have clout, and wield that clout when necessary. Hence, for practical reasons, a junior partner cannot be a successful managing partner. What are other, specific requisites for a managing partner?
The managing partner must keep the objectives of the firm in proper perspective.
The managing partner must be able to rise above the self and understand that the good of the firm comes first.
The managing partner must be able to make decisions and have them stick.
The managing partner must want to manage the firm.
Many partners want to have a great deal of say in firm operations, yet they stop short of following up on their advice with any recognizable action. This kind of "management by debate" leads many a management committee down a blind alley of endless discussions and meetings. This is not the way to manage a law firm — and it is not what most lawyers want to do in their professional life.
As lawyers, the managing partner and the members of the management committee want to practice law. The amount of time available for management is limited and must be used wisely. While there are responsibilities that the committee and managing partner should fulfill, their principal role should be to make certain that the firm's operational activities are being managed. This does not mean that the committee or managing partner should undertake any of these tasks themselves unless specifically charged to do so.
While there are management functions that should be performed by the management committee or managing partner and normally should not be delegated, there are other tasks that can be performed by the individual members of the management committee or other lawyers in the firm. The managing partner and the committee should be charged with responsibility for those functions that require their specific talent, energy and interest.
The firm's management committee will have responsibility for a number of areas. Here are some selected functions the committee should perform:
Monitor the firm's economic performance.
Provide overall long-range planning policy and direction.
Make certain that systems are established and individual are assigned responsibility for all the areas of the firm's management.
Make major decisions and recommendations on such key issues as lawyer compensation, billing rates, additional offices, new areas of specialization, and any other issues with significant economic consequences. The committee needs to evaluate the pros and cons, the effect of the decision on the firm's economics and individual lawyers, and how the decision fits in with the firm's other policies and programs.
Communicate with the firm so that the management committee has the benefit of the views of other lawyers in making management decisions, and so the other lawyers understand the decisions and programs that the committee adopts.
Managing Partner Functions
The managing partner's role is a considerable one. These are among the functions that he or she should perform:
Provide leadership, including maintaining the morale of the lawyers as a group and as individuals.
Anticipate management needs and make recommendations for fulfilling them.
Supervise the firm administrator.
Make decisions on matters that do not warrant consideration by the full management committee (e.g., implementing personnel policy).
Ensure that management committee decisions are fully implemented.
Coordinate all management activities.
Make certain that the systems and individuals responsible for the firm's management are functioning properly.
Finally, there might be overlapping responsibility for some management functions, since some could be fulfilled by the managing partner, a member of the management committee or another designated lawyers. These tasks include the following:
Overseeing the firm's financial matters and reporting system through the administrator, including budgets, billings, collections and cash flow; analyzing management reporting of time and money; and recommending investment of excess funds and banking relationships.
Overseeing lawyer career development, including evaluation, training and general work assignments.
Investigating, evaluating and making recommendations to the management committee regarding special projects, such as acquiring senior lawyers, opening additional offices and specializing in new areas.
Overseeing the firm's facilities, particularly expansion or remodeling.
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