Best Practice: Law Firm Partnership - Pros and Cons
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am a solo owner of a small law firm in Southern Illinois and have been solo for ten years. I have two staff members in the firm. Recently I have been contemplating either bringing in a partner or joining another firm? What are the advantages and disadvantages?
A. Partnership can offer its lawyers a measure of value independent of the skills, talents, and contributions of its individual partners?
The advantages that the best law firms have over sole practitioners or groups of lawyers who share overhead include:
- Shared skills and expertise
- Backup or additional help when needed
- A safety net during economic downturns
- Shared resources, such as technology, library and research access, forms, and work products
- Cross-selling and/or referral of work
- Access to the expertise of lawyers in various disciplines
- Highly trained associates, legal assistants, and support staff
- A firm name or reputation that makes marketing easier
- More-sophisticated and highly skilled management
- Opportunities for individual lawyers to become highly specialized
- A system of partner coaching that brings out the best in each partner
- Emotional support, encouragement, and personal recognition
- Flexibility that allows lawyers to be more involved in probono, community, and bar activities
- Continuation of the firm beyond the tenure of the current owners
Like anything else in life nothing is free and there are tradeoffs. There can be conflict and interpersonal struggles, large capital contributions, requirements for you to be guarantor on huge firm debt balances, missed paychecks, and loss of independence.
John W. Olmstead, MBA, Ph.D, CMC,(www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at email@example.com.