Making the CutA Tyler Wilson Viewpoint on Leadership & Learning
With the economy becalmed, furloughed in neutral, it is hard for a ship’s captain to know how much to pull in or let out the sails to accommodate this year’s clutch of partner candidates.
In this Viewpoint, from our weather-beaten perch in the crow’s nest, we offer 10 observations on navigating the decision to pipe new partners aboard.
1. Closing the hatches
In our view, the same principles apply whether you are sailing in flat seas or stormy waters. There is little sense in allowing short-term thinking to over-influence long-term investments. The better candidates will return more than they cost over the span of their partnership. All good business decisions involve an optimistic outlook. There are no safe bets, but there are always smart risks.
2. Setting strict criteria
Hard as it may be, there is no room for sentiment. The reason why we agonise over the able second lieutenants, who have served their time, is because we know how painful it will be for them not to make the cut, not because we think our judgement of them could be wrong. Those who can only limp over the first hurdle are unlikely to clear the next.
3. Strategy not tactics
In straitened times, existing partners want to know how much it will cost them to make new appointments. In our experience, the dilution of profits is likely to be modest and short-term: by the time a new partner accumulates significant points, their contribution should be greater than their cost. Expect all partner contributions to follow a bell curve over time.
4. Internal examination
Promotion debates naturally concentrate on issues of partner quality and performance. It therefore makes good sense to reflect on the performance of existing partners. This is where you will find your best examples, and your best lessons when it comes to predicting performance. Every firm has successful partners who did not tick every box but who nonetheless had something. If it’s that clients like them, there may be less to fret about in the unticked boxes.
5. Wrong kind of awkward
There is a danger in letting your partner choices be dictated by the primacy of revenue generation. In our experience, you can afford to compromise a little on the business case, but not on the personal case. Many lawyers are good at what they do precisely because they are sharp-elbowed, spiky, or tendentious. A collegiate partnership will not exclude them but wrap them in the firm embrace of high expectations about their conduct. However, beware the sociopathic sorts who flourish at other people’s expense – they will only become more poisonous with time, and are very likely to cause more grief than they make up for by their billings.
6. Allowing exceptions
Every firm is a collection of unequal practices, containing some partners who provide an essential service or presence but can’t achieve average revenue generation. Likewise, other firms must plan successions carefully or risk leaving age gaps in the partnership that might become weaknesses later. Whatever the backstory, it makes sense to flex the usual rules in atypical cases, rather than to insist on reality falling in line with them. Your biggest revenue generators may depend on these people to maximise their own contributions.
7. Blocking the gateway
In large and midsize firms, more people now wear the badge of partner than did 15 years ago. The intermediate step of ‘junior’, ‘salaried’ or ‘fixed share’ partner helps to satisfy ambitions while also managing disparities in earnings between practices and offices. It is also a useful proving ground for candidates for full equity. Beware of the risk though of creating a space that becomes a means of avoiding tough decisions not to promote a loyal lieutenant, or to let them go.
8. Planning for success
By the same token, many firms have gates between different equity bands, to regulate progress to the plateau. Ideally, these should be used as safety nets, not backstops, in the expectation that all equity partners should have the potential to reach the top of the lockstep. Admitting a candidate to the equity thinking that you can block their passage at the next gate can be a sign that you don’t expect them to go all the way.
9. Binding decisions
In many cases, there will be a tension between a practice area claiming to know best about its candidate, and other partners professing insufficient knowledge to cast a vote. It can be hard to know how to handle objections. On the one hand, it is better for promotions to be collective decisions, so that they cannot be disclaimed later; on the other, it is undesirable to let a partnership proposal become an expression of a practice area’s potency. The merits of the candidate should be determinative.
10. Culture checking
Last but by no means least, all partner promotion rounds are now under intense scrutiny for their diversity and inclusivity. Firms can only be as successful against these measures as their earlier progress in recruitment and preferment allows. The acid test for many firms is whether the working culture supports their lawyers’ ambitions for both career and family, as well as cultural differences. By way of example, if your female candidates all feel that they must delay having children until after they secure partnership – or, worse, have left before their name gets in the frame – you can take this as a sign that you have further to go.
If you would like to arrange a coaching conversation to discuss your firm’s partnership dilemmas in confidence, we would love to hear from you.