Dealing with the Unprofitable Partner

Source: Thomson Reuters

In today's legal environment, where pricing pressure and client demands have placed firm profitability under the microscope, law firms can no longer avoid the tough decisions in dealing with an unprofitable partner. Thomson Reuters'; Forum magazine sat down with Amanda K. Brady, Global Practice Leader of Law Firm Management at Major, Lindsey & Africa, a recruiting and talent management consultant for the legal industry, to discuss how firms determine unprofitability and what steps firms can take to best deal with a partner who has stopped contributing.

Forum: It's said that everybody in the office knows who the unprofitable partner is, except the unprofitable partner him- or herself. Is that true?

Amanda K. Brady: It is often the worst-kept secret, but it isn't that these partners really don't know because they do. They see the numbers and know others have seen them, too. However, they spend a lot of time in denial, hoping that things will turn around or telling themselves it was just a bad year or they'll get back the client they lost. But that kind of turnaround would require them to proactively fix it, and unfortunately, they are not accustomed to doing that.

They often hit an emotional fear component. To them, it may feel like they've been able to hide their problems before, but now they are exposed. These are people who've done the same thing for decades and don't know how to do anything else. Now they have to address it, and they're worried about what happens next.

Forum: Has this become a more necessary issue for law firms to address now, given current market conditions?

Brady: Definitely. Law firms have to deal with it because the firms also are dealing with clients who are very aware of costs and the pricing they want to see. So for the managing partners, it becomes a struggle. They have to figure out how to address it, otherwise, they'll have unhappy clients and other lawyers within the firm may leave because it is not being addressed. An unprofitable partner can impact everyone's income as well as the firm's total revenue and ultimately even its ranking.

Read more of this feature at Thomson Reuters Legal Executive Institute.

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