Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. We are a Toledo, Ohio law firm with 10 attorneys. We have four partners – all in their 60s and approaching retirement. While our six associates are great lawyers – none bring in business and they don’t appear to be interested in partnership. It seems that we hired a bunch of folks that just wanted jobs and have no interest in owning a law firm. I would be interested in your ideas and thoughts.
A. Years ago it seemed that all the associates working in law firms wanted to eventually become a partner in the law firm. This has changed as a result of the new mix of women and men graduating from law schools and entering the legal profession, changing attitudes toward work life balance, other opportunities outside law firms, and other variables. While partnership/ownership is still important to many – don't assume that all the associates that you hire will even want to be equity partners – especially if it means a hefty capital contribution and signing personal guarantees for a large amount of firm debt.
A question that I would ask – have you really discussed with your associates their interests in equity ownership? As a group? Recently an associate, whom the firm had written off, advised me that while he was not interested now due to his present situation in life, he would be in maybe five years – especially if others were brought in as well. He did not want to have the responsibility alone and be an equity owner by himself.