As a law firm owner, you appreciate that running a successful business requires plenty of hard work and dedication. It’s not just about practicing law, but also about making a difference, growing your brand, managing finances, and exceeding expectations — and most importantly, you know that you can’t do all of that without a powerful team backing you.
Your team can’t just stay stagnant if you want those A-players to stick around. If you want your law firm to grow, your people must grow with it.
A common solution to growing your law firm and your team all at once is by adding partners over time.
But where do you start? How do you find the perfect partner? How do you create a partner track for associate attorneys? What does great look like in a partnership?
In this article, we’ll discuss:
- Understanding Law Firm Partnership
- The Benefit of Adding Additional Partners
- How to Choose the Right Law Firm Partner
- How to Determine Partnership Criteria
- How to Communicate the Path to Partnership
By the time you’re done reading this, you’ll have a clear understanding of how to create a partner track at your law firm and set your attorneys up for success — now and forever.
Understanding Law Firm Partnership
Before we dive into the details of creating a partner track, it’s important to understand what it means to be a partner in a law firm. So let’s start with the basics:
What is a law firm partner?
According to Clio, the typical definition of a law firm partner is an attorney who buys an ownership interest in the firm and receives a share of the profits. Partners can be further differentiated by whether they are non-equity, managing, or senior partners.
Essentially, partners are responsible for bringing in business and revenue, managing cases and clients, and contributing to the overall growth and success of the firm.
But just because a partnership operates one way in one firm doesn’t mean that it will necessarily look the same in a different one.
That’s because there are different kinds of partners, including equity and non-equity partners, managing partners, and staff partners.
- Equity Partners: Partners who own a percentage of the firm’s earnings.
- Non-Equity Partners: Non-equity attorneys usually do not bring enough business to the table necessary to be an equity partner, and it’s easier for these partners to move to another firm entirely.
- Managing Partner: A managing partner can be an equity partner, income partner, staff partner, or sometimes a senior associate.
- Staff Partner: This title is given to those lawyers who have the expertise but don’t contribute a book of business.
The major differences between all of these partnerships are income, stability, workload, hiring and firing power, titles, and more.
To determine what kind of partnership would work best in your law firm, take a look at your own day-to-day tasks, number of cases, compensation structure, and more. What does the ideal partner look like to you? What does their schedule look like? How much stake do you want them to have in your law firm?
These are questions that only you know the answers to, so make sure you do your internal research and reflection before hiring or promoting someone to take on this incredible responsibility.
The Benefit of Adding Additional Partners
Let’s face it: You lead a busy life as a committed law firm owner, and adding additional partners to your practice is one surefire way to lighten your load.
But you aren’t the only one who will benefit from this new partnership — your team will, too. Having another leader with equity brings in more revenue and profits, assuming you choose to hire an equity partner. It also gives that attorney a larger stake in your firm’s success, meaning that will very likely incentivize them to work harder to bring in more business.
Even if you opt for a different kind of partnership, you’ll have the benefit of lightening your workload and continuing to focus on bettering yourself as the CEO of your law firm instead of just its owner, while also investing in the growth of key players within your firm.
Another benefit of adding partners is accountability sharing. As the founder or leader of the firm, you will have the capacity to handle every aspect of the business as it grows — and that’s okay. You may have a lot on your plate, and adding partners can help alleviate some of the burdens.
When you bring on partners with different areas of expertise, that gives you time to focus on what you are strongest at while they prove themselves in their new specialized role. This can also lead to increased profitability as you tap into new sources of revenue and operate more fully in your unique abilities.
But the benefits to a successful partnership don’t stop there.
Bringing on additional partners allows you to delegate certain responsibilities and focus on your specialty. For example, if you want to become more of a business leader, you may want to bring on a partner focused on practicing law. This division of labor can be extremely beneficial for the growth and success of the firm. Partners can take on specific tasks and responsibilities, allowing you to focus on the areas of the business that you excel in or that require your attention.
Adding partners can also help you plan for the future. Whether you intend on retiring soon or not, when you have a partner, you can begin setting plans in place for when that time does come. That way your team won’t be left in the dark without a succession plan, and you won’t have to scramble at the last minute to make sure everything is in its place (or worse, close up shop altogether).
When it comes to running a law firm, there’s a lot to keep in mind, and we often forget about the important things until it’s too late. When you have a partner to help keep your ideas, plans, and strategies in place, it makes it easier to steer your firm in the right direction.
How to Choose the Right Law Firm Partner
As a law firm owner, you’re in the people business. You help people, and you hire people to help you help people — and that’s just what you’re looking for when searching for the perfect candidate for partnership.
This begs one very important question: How do you choose the right law firm partner?
Before you can determine who your ideal partner is, you’ve got to decide what kind of partnership structure works best for your firm.
While there are several options to consider, single-tier and two-tier structures are typically the most common and the most popular partnerships.
- A single-tier partnership structure is the most traditional partnership. It rewards attorneys who have been with the firm for a long period of time. In this structure, all partners have an equal stake in the firm and share in the profits. This structure is best for incentivizing attorneys to bring in clients and revenue, as they have a larger financial stake in the success of the firm.
- A two-tier partnership structure, on the other hand, includes both equity and non-equity partners. In this structure, not all partners become firm owners or have to buy in. Instead, non-equity partners may receive a salary or other forms of compensation for their contributions to the firm. This structure can be beneficial if you want to bring on high-level attorneys who can contribute to the firm’s success without necessarily having an ownership stake.
When choosing a partnership structure, it’s important to consider your firm’s goals and needs. Ask yourself the following questions:
- Do you want to incentivize attorneys to bring in business and revenue?
- Do you want to bring on high-level attorneys without giving them an ownership stake?
- Are you looking to take more work off your hands?
- Which areas of the business do you want to focus on, and which are you looking to offload to your new partner?
These are important questions to consider when deciding on the right partnership structure for your firm.
In addition to single-tier and two-tier structures, there are also other factors to consider when creating a partner track.
One option is to differentiate between managing partners and senior partners.
- Managing partners are typically responsible for the day-to-day operations of the firm.
- In contrast, senior partners may have more of a mentorship role and be involved in long-term planning and strategy.
This can be a useful way to recognize the contributions and experiences of different partners within the firm.
Another factor to consider is whether to base the partnership on bringing in new business or on work performance.
- Some firms may choose to reward attorneys who excel in business development and bring in new clients.
- Others may focus more on the quality of an attorney’s work and their contributions to the firm. It’s important to carefully consider which approach aligns with your firm’s goals and culture.
Alternative fee structures, such as a profit-sharing model, can also be a useful tool in creating a partner track. In a profit-sharing model, partners receive a percentage of the profits generated by their cases or clients, rather than a fixed salary or equity stake in the firm. This can be a useful way to incentivize attorneys to bring in business and contribute to the firm’s success.
Overall, it’s important to carefully consider all of these options and how they fit with your firm’s goals and needs when creating a partner track. It’s also important to regularly review and reassess the partner track to ensure it is meeting the needs of the firm and its attorneys.
How to Determine Partnership Criteria
Once you’ve decided on the right partnership structure for your firm, the next step is determining the criteria for becoming a partner. There are several factors to consider, including:
- Tenure
- Work performance
- Milestones
- And so much more
Tenure is often a key factor in determining a partnership, as it shows a commitment to the firm and the clients. Typically, leaders reward people who have put time and effort into their roles. If that’s something that shows commitment in your eyes, then that might be the main factor you want to focus on when hiring or promoting your ideal partner.
However, it’s important to also consider work performance, as an attorney who consistently excels in their practice can be a valuable addition to the firm as a partner. You never want to elevate someone who isn’t ready for a position as demanding as a partnership, and even though someone has been at your firm for a long period of time doesn’t necessarily mean that they’re the hardest working or most effective.
Milestones can also be a useful tool in establishing a partner track. This could include a structured career path where attorneys must complete a certain amount of training and education, hit certain targets, and take on additional accountability at each step of their career path toward partnership. This helps set clear expectations and provides a roadmap for attorneys to follow as they work towards becoming partners.
How to Communicate the Path to Partnership
Once you’ve determined the criteria for becoming a partner, it’s important to communicate the path, requirements, and expectations to your attorneys. This should include standardizing and documenting the process and determining who is eligible, and clearly delineating whether it’s available to all existing attorneys or only those hired specifically for the partnership track.
It’s also important to set regular meetings with each attorney individually to communicate the path to partnership, set expectations, and monitor their development. This can help prevent misunderstandings and ensure everyone is on the same page.
Regular check-ins can also help you stay on top of progress and address any questions or concerns that arise along the way.
Stop confusion in its tracks. Make sure everyone understands their roles and opportunities to the fullest extent possible. In addition to that, ensure that they have everything they need to succeed so they aren’t dependent on you for every little thing.
Final Thoughts
Creating a partner track at your law firm is a great way to grow and develop your team. When executed effectively, you can set your attorneys up for success and ensure your firm’s continued growth and success — for both today and tomorrow.
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