When deciding how to cope with the current recession, one strategy that has been implemented with success by managing partners and members of executive committees in many of the more progressively managed law firms has been to conduct a retreat that has been especially designed to address the tensions and insecurities that partners (and associates)may feel about their future.

Typically, managing partners and executive committees in many firms follow the predictable pattern of attempting to enhance the marketing efforts of all of their attorneys, reducing their costs, reassessing the performance of partners, associates and administrative support staffs, reducing and/or holding back partners salaries/draws, shortening the attorney work week as well as their compensation, and, if necessary, changing the status of attorneys and downsizing. In other firms, managing partners and executive committees view the recession as an opportunity to expand their client base and enhance work sophistication, diversify and specialize to fulfill client demands, increase their market share, upgrade their attorney staff and shore-up internal weaknesses. Also, many firms attempt to add or grow some practice areas, at the same time, de-emphasize others, and take steps to maintain or grow their revenue and profits available for the partners through the acquisition of lateral hires with portable books of profitable business.

Even though intellectually, attorneys in law firms understand the importance of considering these and other strategic options as approaches for dealing with the recession, for many lawyers, these strategies are unsettling and fraught with anxiety and uncertainty.

While developing strategies to cope with the recession, managing partners and executive committees must deal with is to understand their partners’ expectations so that the former may develop and begin to implement strategies to reduce costs and enhance the volume of profitable business which, in turn, leads to increased revenue per lawyer and profits per partner.

To satisfy this challenge, partners in many law firms have retained us to plan and facilitate retreats that have been especially designed to obtain partners’ perceptions about how well the combination of their firms’ leadership/governance (policy determination and implementation), culture(s), strategic planning process, partner compensation system, and client base brings out the energies and talents of their attorneys and other issues of significant importance for the future of their firms and then, together with partners, to develop recommendations about how to deal with these several issues.

Below is a list of representative discussion topics that have been addressed during retreats that we have planned and facilitated:

• Identification of opportunities that will enhance the bottom line;
• Practice areas to invest in, maintain and de-emphasize;
• Internal and external trends the firm should take advantage of in the next three to five years and geographic expansion;
• Enhancing client relations with existing clients and developing relationships with potential clients;
• Improving service by broadening or narrowing the firm’s focus;
• Practice management strategies to improve quality control, scheduling work assignments to optimize productivity; and enhance productivity;
• Proposing alternative fee arrangements (i.e., other than hourly billing);
• Containing and/or deferring expenses and capitalizing the firm;
• Dealing with under-utilized attorneys and staff;
• The feasibility of re-tooling/reassigning partners, associates and staff from under-utilized practice areas to different practice areas instead of terminating personnel;
• Reducing the number of working hours and downsizing attorney and administrative staff as a last resort;
• Changes in Compensation: Partners and Associates, including providing financial incentives to motivate partners to cross-sell legal services to existing clients and cultivate new prospects within the current and potential marketplace; changing associate pay structures to reward performance and changing partner draw schedules to preserve cash; and
• Increasing lateral recruitment and merging to upgrade and expand the firm’s expertise to better serve existing and potential clients.

Whichever of the above are your firm’s goals for a retreat, it will not succeed unless adequate time and effort have gone into the planning process. In fact, a major portion of the work involved in conducting a retreat must be done before the retreat is actually held. The retreat should not be viewed as a panacea, but as a practical management tool that can be wielded in a variety of ways to assist the firm achieve its objectives.

Retreat Objectives:

The structure, discussion format and duration of the retreat will invariably be determined by what the firm wants to achieve. For example, if there are new trends in major practice areas, then the meeting might entail a review of the firm's ability to take advantage of those potential growth areas. Some firms may use the retreat as a forum to establish plans for transitioning clients from senior partners to others, etc. Often a crisis dictates the agenda, more than likely involving firm economics. If the volume of profitable work has declined and a firm's net profits are down, then the objective of the retreat might be to examine the causes of the problems and what to do about it. Also, it may be necessary to “tweak” or change the firm’s present partner compensation system to incentivize desired behaviors. For example, if a compensation system rewards a certain behavior, then it is likely the partners will engage in that behavior. If, on the other hand, the compensation system does not reward a specific behavior, it will be unlikely that the partners will engage in that behavior. It is perhaps best tool (perhaps the only tool) toward getting partners to change behaviors. As the needs of a firm change, it will be important to have a compensation system that can be adjusted to encourage or discourage different behaviors. During a recession, the firm may need more client generation, more delegation, more cross-selling, or more teamwork. Regardless of whether the compensation system is formula-based or subjective, changes in the factors considered or the weight each factor is given, will encourage the needed behaviors.

Benefits notwithstanding potential drawbacks to a retreat also must be considered. The amount of time involved in planning and attending the retreat can reduce billable hours. Depending upon the size and geographical dispersion of the firm, the cost of a retreat may be substantial. If the retreat involves open discussions, some partners may object to the diffusion of firm decision-making. There is also the possibility that discussions on such topics as individual commitment or other personal philosophies will become volatile and fuel or exacerbate dissent.

Despite these and other potential mishaps, with proper planning, guidance, a strong retreat facilitator, and the establishment of ground rules, the benefits to be derived should outweigh the risks. Because the process is an effective method for the firm to identify objectives, appraise results and address various critical issues, considerable time and effort should be devoted to planning the retreat.

Selecting the Planners:

The retreat planners should be selected by the firm's management after considering the objectives of the retreat. A smaller firm may assign the planning function to one or two partners. Larger firms usually designate a committee of partners assisted by the office administrator. The retreat planning committee should consist of partners from the firm's major practice areas and branch offices - those who have key roles in the administrative and substantive management of the firm. By involving a diverse representation of partners in the planning process, lawyer management can reaffirm its credibility and establish a basis for consensus. In many instances this mixture of partners is politically expedient and ultimately critical to the success of the retreat. By drawing the various factors into the planning process at the initial stage, the firm begins to acknowledge the importance of issues that may be disrupting its unity.

At this juncture, the firm should determine whether the use of an outside consultant would be beneficial. If the subjects to be addressed are of a highly sensitive nature, or are of subjects which the firm's partners have limited or no experience addressing, an experienced law firm consultant may indeed be essential. The consultant is particularly beneficial in instances where a firm may wish to address such topics as organization, profit distribution, or long-term strategic planning, approaches for retiring unfunded pension obligations, reductions in staff, potential mergers, etc. The consultant can function as a leader, lecturer, adviser, facilitator, and resource on specific topics. He or she also can assist in the planning process, and in gathering and analyzing firm financial data and providing background on subjects for educational purposes.

Surveying Partners:

The next phase in planning involves interviewing the firm's managing partner and members of the executive committee and surveying by personal interview or questionnaire all or a representative number of the partners. The number of partners to be surveyed is frequently determined by the number of partners to be interviewed and the objectives of the retreat. The more sensitive the issues to be discussed, the more important it is that all of the partners be surveyed through interviews and/or questionnaire to obtain their perceptions about which subjects should be discussed during the retreat. Partners may be more willing to "open-up" and confide in an outside consultant than to discuss sensitive issues with another partner, especially if the former has a different opinion than the latter on proposed discussion issues.

Hence, maintaining the confidentiality of individual partner responses when conducting interviews/tabulating questionnaire results are a significant benefit to be inured as the result of retaining an outside law firm consultant.

While working with larger law firms, it has been especially beneficial to cross-tabulate and analyze the results of interviews/questionnaires by: (1) ages of the partners, (2) whether the partners are lateral hires or have progressed through the firm's career development program, (3) primary practice area(s), (4) office location, etc. These results, when analyzed in relation to other partners' responses, usually provide valuable insights about the attitudes of partners.

Admittedly, the interview/questionnaire survey process is time consuming. But we have found it to be a particularly effective method of drawing all the partners into the planning process. Interestingly enough, we have discovered that responses to the questionnaires/ interviews reveal that there is more ground in common among firm members than may be apparent at the beginning of the retreat planning process.

Developing the Agenda:

Once the issues raised by the partners in the interview/questionnaire are reviewed against the proposals submitted by the managing partner, the executive or management committee and /or the retreat planning committee, the planners should have adequate information to use in developing an agenda for the retreat.

The format of the retreat should be determined by the retreat's primary objectives, the participants attending the various discussion topics, i.e., partners only, partners and associates, or a combination. We frequently suggest that the retreat be held at a facility away from the office. Such a facility usually offers participants with the opportunity to socialize to a greater extent than they otherwise would in the office, and to personalize relationships and gain greater appreciation of each other.

From a planning perspective, the agenda should: include dates, times, location(s), description of the meeting format(s) [i.e., meeting of the whole, workshops, or a combination], retreat discussion leaders, participants attending the discussion sessions [i.e., partners only, associates only, partners and associates, etc.].

Economic data and other background information pertinent to the issues that will be discussed should be available to participants prior to the retreat. If a possible merger with another firm, or lateral hires are to be subjects for discussion, it is recommended that pro forma financial statements be prepared and distributed to the partners in advance of the retreat showing the likely impact of the implementation of these plans on the firm.

A retreat workbook should be published and distributed to all participants prior to the retreat. It should include the overall agenda and discussion outlines or background information about each of the selected topics, the firm's financial data and analysis, survey results and other pertinent data. This handout material serves a dual purpose. It helps prepare all participants, both leaders and partners, for their roles at the retreat and the economic data included in the workbook is beneficial in establishing a springboard for future planning.

Selecting Leaders:

Retreat leaders should be selected on the basis of their leadership and communications skills, knowledge and insights about the firm, objectivity, and ability to generate and control discussions on specific topics. Generally, partners representing various age groups and practice areas may be selected to serve as discussion leaders. Many firms intentionally assign responsibility for discussion to younger or mid-level partners to expose them to their colleagues and encourage greater participation in firm administration.

Conducting the Retreat:

The retreat leaders should understand the objectives of the retreat and be responsible for stimulating and controlling the discussions. The leaders must make every effort to insure that all partners participate and be adept at eliciting responses from any hesitant participants. If the retreat topics include sensitive issues, the planners may wish to articulate specific ground rules that set forth methods for dealing with those subjects in a manner that fosters diplomacy. We encourage having open and reasonably candid, yet respectful discussions about each retreat topic, but are proponents of the theory that any comment or criticism with a negative shading should be balanced by a suggestion for improvement.

Post Retreat Activities:

The final phase of the retreat should emphasize the follow-up of action plans agreed upon during the retreat. The executive committee or the retreat planning committee should assume the role of overseer to make certain that a written summary of the proceedings is prepared which identifies action plans agreed upon, the partner responsible for implementation or status reporting to the partners and the date for implementation of status reporting. The committee should also arrange for publication and distribution of the notes to the partners, establish follow-up procedures for reporting on the status of those action plans upon which a consensus was reached during the retreat.

The extent to which the partners are willing and able to implement policies and programs agreed upon at the retreat will determine their level of commitment to the firm for the future.

*Joel A. Rose is president, Joel A. Rose & Associates, Inc., management consultants to law offices specializes in law office management and legal economics is based in Cherry Hill, NJ. He received a B.S. from New York University and an M.B.A. from the Wharton Graduate School of Business, University of Pennsylvania. He has extensive experience consulting with private law firms, corporate law departments and government agencies. Mr. Rose performs and directs consulting assignments in law firm management and organization, strategic and financial planning, lawyer compensation, the feasibility of mergers and acquisitions and marketing of legal services. He has extensive experience planning and conducting retreats and special expertise resolving problems among and between lawyers. Mr. Rose may be reached at (856) 427-0050 or at jrose63827@aol.com.