Tackling Partner Underperformance 2nd edition
Nick Jarrett-Kerr, Patrick J McKenna, Edwin Reeser, Angus Lyon
Published: 2021
Pages: 236
eBook: 9781787426672
Indepth research, expert insight, and practical strategies for addressing the sensitive issue of partner underperformance in law firms.
Life has become even more difficult for partners, for whom performance demands have increased at the same time as the availability of work has tailed off. Underperformance continues to affect law firms in many ways, not least of which are diminished profitability, loss of opportunity, the disaffection of high performers, challenges to the firm's values and falling morale. What is more, underperformance has to be seen not just in terms of productivity but also in terms of a more holistic approach to a firm's standards.
Drawing on original and academic research from the past 8 years, and featuring contributions from law firm performance experts including Edwin Reeser, Angus Lyon, and Patrick McKenna, author Nick Jarrett-Kerr's highly anticipated Tackling Partner Underperformance 2nd Edition covers topics including:
Trends in partner performance
Understanding why partners underperform or are underproductive
Judging, rating and evaluating partners
Aligning performance with partner compensation and rewards
Supporting and rehabilitating underperforming partners
Stress and mental illness impact on performance
Systems for partner performance management
Underperformance culture
Governance, communication and conflict management
And more.
Tackling Partner Underperformance 2nd Edition is arguably the most comprehensive study ever undertaken into partner underperformance in law firms, and those firms (regardless of size and location) who utilize and implement the information, advice and practical strategies for addressing this issue, will see significant differences in their productivity and ultimately profitability.
Table of Contents
| Cover | Cover | |
|---|---|---|
| Title page | i | |
| Copyright page | ii | |
| Contents | iii | |
| Introduction and executive summary | ix | |
| About the author | xv | |
| Chapter 1: Introduction and trends | 1 | |
| Motivating partners to perform | 3 | |
| Setting standards and managing performance | 5 | |
| Defining underperformance | 7 | |
| The implications of performance issues within law firms | 8 | |
| Values and culture | 10 | |
| Chapter 2: Clarifying and managing the expectations of partnership | 13 | |
| Understanding the “critical areas of performance” in which partners need to contribute | 16 | |
| Typical critical areas of performance | 16 | |
| Defining specific roles and responsibilities to play to strengths | 20 | |
| Human capital and the development of people and skills | 21 | |
| Structural capital and the development of the firm as an institution | 22 | |
| Relational capital and the development of business | 22 | |
| Economic capital and the management of performance | 23 | |
| Linking performance and the firm’s values | 23 | |
| Financial management | 24 | |
| Allocation of resources | 24 | |
| External and internal conflict | 24 | |
| Coping with ambiguity | 24 | |
| Profit sharing | 24 | |
| Risk management | 25 | |
| Hiring decisions | 25 | |
| Client service | 25 | |
| A balanced approach | 25 | |
| Chapter 3: Understanding why partners underperform or are underproductive | 33 | |
| Reason 1: Wrong choice of partner | 33 | |
| Reason 2: Failure to keep up with the pace of change | 34 | |
| Reason 3: Non-core areas of law | 37 | |
| Reason 4: Internal political troubles, quickly formed perceptions and favoritism | 38 | |
| Reason 5: Trouble at home | 38 | |
| Reason 6: Stress, depression, insecurity and loss of confidence | 39 | |
| Reason 7: Burn-out and boredom | 40 | |
| Reason 8: Lifestyle and comfort zones | 41 | |
| Reason 9: Imbalanced personal score card | 42 | |
| Reason 10: Merger and extreme change | 42 | |
| Reason 11: The entitlement problem | 42 | |
| Reason 12: An investment area does not work out | 43 | |
| Conclusion | 45 | |
| Chapter 4: Judging, rating, and assessing partners | 47 | |
| Data, evidence and measures | 47 | |
| Measuring effort | 49 | |
| Methods of rating partners | 50 | |
| Model 1: an overall banded rating | 52 | |
| Model 2: performance scoring | 54 | |
| Model 3: forced ranking | 55 | |
| Model 4: overall judgement | 56 | |
| Chapter 5: Adapting business metrics to fit law firms | 65 | |
| Profit margin on operations | 66 | |
| Structure of the firm’s compensation model | 69 | |
| Analyzing firm debt trends to discover partner compensation challenge | 70 | |
| Liquidity: the working capital ratio | 74 | |
| Chapter 6: Aligning with partner compensation and rewards | 79 | |
| Trends in compensations systems | 79 | |
| The links between performance management and compensation systems | 81 | |
| Optimising the compensation system to align with partner performance | 87 | |
| Conclusion | 88 | |
| Chapter 7: Supporting and rehabilitating underperforming partners | 95 | |
| Helping lawyers to respond to change | 95 | |
| Supporting through collegiality | 96 | |
| Should partners be self-starters? | 97 | |
| Coaching | 98 | |
| Mentoring | 99 | |
| Outplacement | 100 | |
| Counselling and medical support | 100 | |
| Skills training | 101 | |
| Intensive care | 102 | |
| Chapter 8: When lateral hires fail | 103 | |
| Lateral hires and the myth of inevitable success | 103 | |
| Whose fault is it? | 104 | |
| How to cope with failure | 106 | |
| Chapter 9: Stress and mental illness – a wicked legal problem? | 111 | |
| The statistics | 111 | |
| Wicked legal problems | 115 | |
| Stigma | 116 | |
| Stress has had a bad press | 117 | |
| Can stress be healthy? | 119 | |
| Adjusting your frame of mind | 120 | |
| Chapter 10: Systems for partner performance management | 123 | |
| Objectives for a performance management system | 124 | |
| Partner personal plans | 128 | |
| Reviewing, appraising and assessing partners | 130 | |
| Ten key rules of objective setting | 138 | |
| Chapter 11: Performance management in progressive firms: a case study | 147 | |
| Philosophy and culture | 147 | |
| Partner remuneration | 147 | |
| Capital and voting | 148 | |
| Partner performance management in medium-size firms | 149 | |
| Core roles for partners | 149 | |
| Coping with underperformance | 150 | |
| Chapter 12: Managing underperformance | 153 | |
| The link with the firm’s governance and partnership compensation/remuneration scheme | 155 | |
| Setting criteria and constant standards | 156 | |
| Dealing with difficult partners | 157 | |
| The performance procedure for underperformers | 158 | |
| Active management and cascading the principles of active management throughout the firm | 161 | |
| Persistent follow-up | 162 | |
| Chapter 13: Options for coping with underperformers | 167 | |
| The changing scene – relative underperformance | 167 | |
| Reinvigorating moderate performers | 168 | |
| Incremental performance improvement across teams and the firm | 169 | |
| Addressing weak performance areas – partner development, training and re-training | 169 | |
| Rehabilitation of temporary strugglers | 170 | |
| De-equitizing partners | 170 | |
| Facilitating partner moves | 171 | |
| Voluntary and negotiated departure | 172 | |
| Expulsion | 173 | |
| Chapter 14: Lost causes and other thorny issues | 175 | |
| Question 1: How would you define underperformance? | 175 | |
| Question 2: What are some of the common reasons you have witnessed for why professionals may underperform? | 176 | |
| Question 3: Why do intelligent and capable leaders avoid taking action when they first detect a problem? | 177 | |
| Question 4: Are there ineffective ways in which you have seen firms try to signal that there is an underperformance problem? | 179 | |
| Question 5: Given that de-equitizing underperforming partners can be a blow to the ego of the affected attorney, and also erode the morale of others, how should this situation be approached? | 181 | |
| Question 6: Can you recommend some prescriptive steps for any leader to use to deal with these thorny issues and to handle sensitive discussions? | 183 | |
| Question 7: What do you do if you sense you are dealing with a “lost cause?” | 185 | |
| My concluding thoughts | 186 | |
| Chapter 15: Avoiding an underperformance culture | 189 | |
| Building a collaborative firm | 190 | |
| Chapter 16: Governance issues | 197 | |
| Changes in law firm governance | 197 | |
| Essential elements for defining partner disciplines and accountabilities | 198 | |
| The leadership challenge | 201 | |
| Partnership voting rights | 203 | |
| Changing the governance | 204 | |
| Governance to develop an investible law firm in which issues of underperformance are minimized | 204 | |
| Interlinked requirements | 206 | |
| Chapter 17: Communication and conflict management | 209 | |
| Communicating with underperformers | 209 | |
| Communications within the firm | 213 | |
| Client succession issues | 215 | |
| Seven ways to communicate and address common obstacles to internal projects | 215 | |
| Barriers to change | 216 | |
| Gaining buy-in | 217 | |
| External publicity and communications | 218 |
NICK JARRETT-KERR
Nick Jarrett-Kerr is a specialist advisor to law firms and professional services firms worldwide on issues of strategy, governance and leadership development. Nick is a member of Edge International, a leading global consultancy to law firms, and in the last twelve years has established himself as one of the leading UK and international advisors. Prior to becoming a consultant, Nick was the Chief Executive Partner of Bevan Ashford, a leading regional firm in Great Britain, for eight years. Nick is the author of two published books on partner underperformance and law firm strategy, and is currently Visiting Professor at Nottingham Trent University where he leads the strategy modules for the Nottingham Law School MBA.
PATRICK J. MCKENNA
Patrick J. McKenna is an internationally recognized author, lecturer, strategist, and seasoned advisor to the leaders of premier professional service firms. His published articles have appeared in over 50 leading professional journals and his most notable book, First Among Equals (2002), topped bestseller lists in the US, Canada and Australia and has been translated into nine languages. He was recently voted by the readers of Legal Business World as one of only seven international Thought Leaders (2017).
EDWIN REESER
Edwin B. Reeser is a business lawyer specializing in structuring, negotiating and documenting complex real estate and business transactions. He also counsels law firms and lawyers on partnership agreements, partner compensation, lateral movement, professional ethics, capitalization and operations. He is the director of Edwin B. Reeser, a professional law corporation, the author of over 100 published articles, and is a former managing partner of firm Sonnenschein Nath & Rosenthal.
ANGUS LYON
Angus Lyon has practised as a litigation solicitor for 35 years and, since 1987, as a partner at Mears Hobbs & Durrant. He has specialised as a claimant personal injury lawyer for the last 20 years and has regularly been recommended in this area of work in the Legal 500. He is a professional deputy. Partly as a result of his growing work in psychiatric injuries, Angus developed an interest in psychotherapy and obtained a secondary qualification as a counsellor. He is a registered member of the British Association of Counselling and Psychotherapy, and is a director and co-founder of Catalyst Counselling CIC, a social enterprise providing counselling and training in East Anglia. He has been a LawCare volunteer since 2008.