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Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Q. I am an owner of a 5 attorney law firm in the upper midwest. There are 4 associates in the firm and I hope to eventually make them partners. I have two children that will be finishing law school in the next year or two and they have expressed an interest in joining the firm. Is this a good idea? I have heard horror stories about such arrangements? What are your thoughts? A. I have seen it go both ways. Many firms have brought children and other family members into the firm and have had excellent results. Others have not. In general I believe that law firms do a better job at this than do other business firms. Your situation is more complicated since you have associates in place that may feel threatened and uncertain as to their futures when you bring in family members. I believe that if you lay the proper foundation and go about it correctly you can successfully bring your children into the firm. Here are a few ideas:
  1. Recognize that for the family members there will be a family system, the family law firm, and an overlapping of these systems. This can be fertile ground for conflict if clear boundaries between the family role and the firm (business) role are not clear. Establish clear boundaries. Family dynamics and business dynamics seldom mix. Your objective should be to draw the clearest possible distinction between the two and make sure that everyone understands that the firm (business) is the firm and the family is the family.
  2. Children should not be brought into the firm unless they want to be involved and satisfy your standard hiring criteria for lawyers.
Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Q. Our firm is a 25 attorney IP law firm located in Washington D.C. Metro area. We are planning our year-end firm retreat to plan for next year. This will be our third retreat. While we believe we have achieved some positive results from the last three retreats - we believe that we need to accomplish much more. What are your ideas or thoughts on the matter? A. We find that many law firms try to use their retreats to be an extended version of their regular partnership meetings. They simply try to do too much. The agendas are loaded down with far too many topics. As a result there is a lot of debate and discussion on often day-to-day operational items and no focus on the more complex-strategic issues that often have been ignored or pushed under the rug. This year try to do less and achieve more!
Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Q. Our firm has been discussing how to handle one of our partners. We are are 25-attorney firm. One of our mid-level partners who is one of our highest fee producers and best business getters simply won't follow firm policy or play by the rules. He won't turn in time-sheets in a timely manner, he is argumentative with others in the office, and not a team player. He is "me first" while the rest of the partners in the firm are mostly "firm first". We are trying to build a team-based practice and this one partner is holding up our progress. Do you have any thoughts or suggestions on how we should handle this? A. Dealing with "maverick partners" is always a challenge. Of course, they seem to always be the heavy hitters and this makes it that much more difficult as often there are major clients and large sums of money at stake - at least in the short term. This can also be major issues and large sums of money at stake in the long term if you don't deal with the maverick partner as well. In addition you won't be able to achieve the vision and goals the firm is trying to achieve.
  • For starters - if you have not already - create a well understood set of firm core values or code of conduct that governs behavior in the firm.
By John W. Olmstead, MBA, Ph.D, CMC For the past six weeks I have been discussing the characteristics of successful law firms and introduced the following basic building blocks that successful firms typically have in place:
  • Partner Relations
  • Leadership
  • Firm Management
  • Partner Compensation
  • Planning
  • Client Service
  • Marketing
Partner relations, leadership, management, partner compensation, planning, and client service blocks have been discussed. The seventh and final basic building block is marketing. Successful firms have an effective marketing infrastructure and program in place. Gone are the days when attorneys simply practiced law. Today, they face increased competition, shrinking demand for services and increasing supply of professional talent, availability of service substitutes, and marketing of professional services. Marketing can no longer be ignored if small law practices are to survive in the future. Based upon our observations working with client law firms over the past twenty six years we have concluded that marketing is poorly understood and ineffectively implemented in many small law firms. In addition, the following obstacles are at play:
By John W. Olmstead, MBA, Ph.D, CMC For the past five weeks I have been discussing the characteristics of successful law firms and introduced the following basic building blocks that successful firms typically have in place:
  • Partner Relations
  • Leadership
  • Firm Management
  • Partner Compensation
  • Planning
  • Client Service
  • Marketing
Partner relations, leadership, management, partner compensation and planning blocks have been discussed. The sixth basic building block is client service. Successful firms deliver exceptional client service. They don't just meet client expectations - they exceed them. This is the decade of the client. Clients are demanding and getting – both world-class service - and top quality products. Many law firms have spent too much energy on developing new clients and not enough retaining old ones. For many law firms, obtaining new work from existing clients is the most productive type of marketing. Delivering great client service is extremely important in today’s legal marketplace. More and more lawyers and law firms are competing for fewer clients while client loyalty continues to drop. It is no longer sufficient to simply be competent or an expert in today’s competitive legal environment – law firms must distinguish themselves by the service they provide. Lawyers and law firms must strive for 100% client satisfaction.
Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC For the past four weeks I have been discussing the characteristics of successful law firms and introduced the following basic building blocks that successful firms typically have in place:
  • Partner Relations
  • Leadership
  • Firm Management
  • Partner Compensation
  • Planning
  • Client Service
  • Marketing
Partner relations, leadership, management, and partner compensation blocks have been discussed. The fifth basic building block is planning. Successful firms have a long range business or strategic plan in place. Based upon our experience from client engagements, we have concluded that lack of focus and accountability is one of the major problems facing law firms. Often the problem is too many ideas, alternatives, and options. The result often is no action at all or actions that fail to distinguish firms from their competitors and provide them with a sustained competitive advantage. Ideas, recommendations, suggestions, etc. are of no value unless implemented. Well designed business plans are essential for focusing your firm. However, don’t hide behind strategy and planning.
Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC For the past three weeks I have been discussing the characteristics of successful law firms and introduced the following basic building blocks that successful firms typically have in place:
  • Partner Relations
  • Leadership
  • Firm Management
  • Partner Compensation
  • Planning
  • Client Service
  • Marketing
Partner relations, leadership building, and management blocks have been discussed. The fourth basic building block is partner compensation. Successful firms have a good partner compensation in place. Partners frequently advise us in confidential interviews that they are more dissatisfied with the method used to determine compensation than with the amount of compensation itself. How much and how partners are paid are probably the two most challenging management issues that law firms face. Many law firms are struggling with compensation systems that no longer meet the needs of the firm and the individual partners. Failure to explore alternatives to failing systems often result in partner dissatisfaction leading to partner defections and disintegration of the firm. In many law firms compensation systems have been counter-cultural and failed to align compensation systems with business strategies. As more law firms move toward teams many are incorporating new ways to compensate partners in order to develop a more motivated and productive workforce. Team goals are being linked to business plans and compensation is linked to achieving team goals.
Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC For the past two weeks I have been discussing the characteristics of successful law firms and introduced the following basic building blocks that successful firms typically have in place:
  • Partner Relations
  • Leadership
  • Firm Management
  • Partner Compensation
  • Planning
  • Client Service
  • Marketing
Partner relations and the leadership building blocks have been discussed. The third basic building block is management. Successful firms have a good governance and management structure in place and effectively manage the firm. A major problem facing many law firms is the lack of long range focus and the amount of partner time that is being spent on administrative issues as opposed to higher level management issues. Time spent in firm governance and management, if properly controlled, is as valuable as, if not more valuable, than the same time recorded as a billable hour.
Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Last week I discussed the characteristics of successful law firms and introduced the basic building blocks that successful firms typically have in place. These are:
  • Partner Relations
  • Leadership
  • Firm Management
  • Partner Compensation
  • Planning
  • Client Service
  • Marketing
  • Last week we focused on partner relations as a core foundational building block.
The second basic building block is leadership. Successful firms have good leadership in place. This may be a single individual or a core group of individuals. Leadership does not always come from the formalized management structure of the firm. Leadership is one of the major problems facing law firms. Leaders are needed for managing partner posts, executive committee chairs, and practice group heads. Leadership behaviors include:
  • Developing people
  • Being able to influence others
  • Encouraging teamwork
  • Empowering people
  • Using multiple options thinking
  • Taking intelligent risks
  • Being passionate about work
  • Having a strong clear vision.
  • Leadership skills will need to be included in compensation systems.
Seven traits of effective leaders include:
Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Q. My partner and I just started our firm two years ago. We have one associate attorney and one staff member. As we grow our firm what should we keep in mind so we don't repeat some of the mistakes that I have seen in other firms that have not been successful? A. I often refer to what I call the Basic Building Blocks of Successful Law Firms which are:
  • Partner Relations
  • Leadership
  • Firm Management
  • Partner Compensation
  • Planning
  • Client Service
  • Marketing
Lets take the first one - Partner Relations. This is the foundation (bedrock) of a successful firm. A successful firm has a healthy partner culture - a good marriage. In such a culture partners share common vision and purpose, respect one another, shoot straight with each other, and have difficult conversations and discussions when needed and deal with issues and problems. In many firms this is not the case and these firms often are characterized by the following:
  • Partner Defections
  • Firm Splits and Break-ups
  • Personal Fiefdoms
  • Maverick Partners
  • Hoarding Work
  • Lone Rangers
Such firms are often doomed from the start. Firms that don't get this foundational building block right will build a firm on a shaky foundation. Before forming a partnership - go slow and get to know the other lawyer or lawyers and insure that the marriage makes sense, that you share similar goals and values, that you will be compatible, and you will be good partners.