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Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the owner of a 14-attorney law firm in South Bend, Indiana. The firm is a health care firm that represents various medical facilities in the area. I am the managing attorney who makes all of the management decisions, and all of the other attorneys in the firm are associates. I also bring in the bulk of the firm's clients. I want to retire in the next five years and would like to sell my interests to three associates in the firm. However, I am unsure if they will be good partners with each other, whether they have the management and client development skills to lead the firm, or even if they would want to be partners. My other option would be to merge with another firm. I prefer to sell my interests to the three associates rather than merge if at all possible. What are your thoughts?


Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am a founding partner of a two-partner firm. We have been in business for three years. We have six associates and our practice focuses on health care law. My partner and I each have a 50 percent interest in the firm and our compensation is based on our ownership percentages. We split firm profits 50/50. Since starting the firm, I have been bringing in substantially more fees that my partner. This year I will bring in 65 percent of firm fees. I am getting frustrated and feel that our compensation system is unfair and needs to be changed. I would appreciate your thoughts.


Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am a partner in a 14-attorney firm in Denver. We have six equity partners and eight associate attorneys in the firm. Our practice is limited to health care law. We represent many local hospitals. Our associates range from those who have been with the firm less than one year to those who have been with the firm for over 15. None of our associates have developed business development skills and none of them have ever brought in a single client. Most would be unable to retain existing clients if the partners left the firm. This is in part our fault. When we hired them, we told them that we had plenty of client work and their mission was to bill hours and service our clients. However, as we the partners age and consider the future of the firm, we are beginning to realize that this was a mistake. How can we turn this around?


Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the sole owner of a six-attorney energy law practice in Houston. I have had my practice for twenty years and have enjoyed the independence of being the boss, but I am tired of being solely accountable for the success of the practice, having to do all the management, and having all the worry and stress. I believe I have reached the point where I am ready for a partner or partners and I believe that the practice can be positioned for growth if I bring in a lateral partner, make a couple of my associates partners, or merge with another firm. I welcome any suggestions that you may have.


Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am a partner in a six-attorney estate planning firm in Dallas, Texas. For many years, our primary marketing activity has been seminars that we put on for clients, prospective clients, and referral sources. These seminars have been put on solely by our firm, or in partnership with other organizations such as nursing homes, hospitals, etc. These seminars have been free of charge. We provide a lot of value at these seminars and have been wondering whether we should charge a fee. We would appreciate your thoughts.


Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our firm is a 25-attorney firm located in Austin, Texas. I am the firm administrator. We are planning on having a firm retreat in February and are wondering whether we should include the spouses. Some of our partners think we should include spouses while others think that we should not. We have had retreats in the past and have not included spouses. I would appreciate your thoughts.


Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. We are an Oklahoma City law firm of 17 attorneys, 10 of whom are partners. Our firm does a little of everything. We have a three-member management committee of which I am a member. The firm was founded by four of the present partners 22 years ago. For many years, the firm was very successful; however, for the last five years, we have been financially hard-pressed and stagnant. We have been discussing what to do about the situation. One of our partners suggested marketing and another suggested that we needed a new strategy. We do not have a marketing plan and I didn’t know we have a strategy in place. I would appreciate your thoughts.


Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am an equity partner in a 36-attorney firm in Miami. We have seven equity partners, eight non-equity partners, and 21 associates. Our practice is limited to civil litigation defense and our clients are institutional clients consisting of business firms, governmental agencies, and insurance companies. The ages of our equity-partners are: 64 62, 60, 58, 54, 48, and 44. The firm does not have a succession plan for the senior partners and has not discussed the matter. I am not sure what the partnership agreement provides. I am concerned about our future if we don’t start addressing this. I would appreciate your thoughts.


Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am a partner in a 12-attorney firm in Rockville, Maryland. We are a first-generation corporate transactional and litigation firm. The firm was founded by the four equity partners twelve years ago. We have been very successful over the years and this is borne out by our excellent financial performance. While we have done well in our core practice areas, we are considering diversifying our practice into government sector work due to our proximity to Washington, D.C. We are considering merging with a six-attorney (three partner) firm in D.C. that is totally focused on such work. Can you share with us any pitfalls that we should look out for?


Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am a partner in a firm in Los Angeles. We have nine attorneys: four partners and five associates. We are a young firm in that we have only been in business for four years. The four partners started the firm together, and we are equal partners who split the profits equally. When we started the firm, we each made equal capital contributions. We do not have a partnership agreement. We are thinking about bringing in two associates as equity partners and are trying to think through the mechanics. One of our questions is whether there should be a buy-in and, if so, how should we determine it. We would appreciate your thoughts.