GPSolo Magazine - September 2004

Practice Management

The Vanishing Partnership Carrot

Partnership no longer holds the allure it once did. Many young lawyers perceive partnership as less attractive and more difficult to attain than it appeared in the past. Firms can no longer assume that all associates, or even the vast majority, are willing to run the partnership gauntlet. Rather than extending themselves to their limits for seven or eight years either to be accepted or rejected for partnerships, many associates are changing gears earlier in their careers, when they are more marketable. What’s the upshot? To prosper in today’s practice environment, firms must understand the factors that have reduced the appeal of partnership and consider new strategies to retain and motivate their most valuable associates. Sufficient numbers of lawyers have abandoned, privately or openly, the pursuit of partnership to warrant closer examination of what has changed their perception. The key factors fall along two lines: partnership’s attainability and its desirability.

Attainability . Perceptions of the decreased attainability of partnership are variously attributable to economic realities, the firm’s culture, and particular partner attitudes.

Law firm economics. Today’s associates have access to a plethora of information about salaries, hiring trends, and partnership statistics in larger law firms. This information indicates that, statistically, the odds are getting tougher. First, many firms are admitting fewer partners. Second, where firms are admitting new partners, they are often lengthening the partnership track to between seven and ten years. In addition, a significant number of firms have created a non-equity partnership tier that defers the monetary rewards of partnership. While the newly admitted partner enjoys the status of being called a “partner,” the individual will not share in firm profits or hold many other partnership attributes for several more years, when and if he is elected to equity partner status. The message new lawyers receive from this data is that their chances of making partner are significantly lower than those of prior generations—and even if they do attain partnership, they will have to wait much longer to reap its benefits. Given these lower odds, and knowing their efforts may ultimately prove fruitless, many are hesitant to make the effort necessary to achieve partnership.

The competitive and uncertain environment. Firms are less stable than they used to be. For a variety of reasons beyond an associate’s control, she could deliver outstanding work for eight years only to see her firm dissolve or merge, tossing her status up in the air. In the worst of these scenarios, the firm disappears and the associates are out of work. But even if a firm survives a merger, new partners can lose partnership status and senior associates can be backtracked and forced to prove themselves all over again.

Perception that criteria are unfairly applied. Another dynamic comes into play when considering women and minority lawyers. These groups may lose interest in partnership because they do not perceive it to be as accessible to them as it is to white males. While many of these lawyers may begin private practice with confidence in their chances for partnership, many become skeptical of the equality of their opportunity. Demographic realities tell them that, in addition to the generally applicable factors making partnership more difficult to attain, their female or minority status makes their chances even slimmer.

Loss of trust between partners and associates. Many associates no longer trust that partners care about helping them develop and seeing them succeed. They believe that some partners view them as “fungible production machines.” Accordingly, some associates are suspicious that even if they perform well for seven or eight years, the firm remains financially viable, and new partners are being admitted, the particular partners for whom they’ve worked may turn their backs on them. The associates are skeptical that the partners will keep their side of the bargain.

Desirability. Some of the factors affecting the perception of desirability stem from today’s legal environment, while others arise from the value systems of the associates themselves.

Loss of security and potential liability. The desirability of partnership has been affected by the many law firm failures and the potential for increased liability for firm debts or judgments. With the advent of the Enron age and the increasing number of legal malpractice claims, some associates would prefer simply to collect a salary than risk potential liability.

Desire for work-family balance. Many lawyers—particularly women—have decided they cannot do it all and are determined to spend a significant amount of time with their children. They are willing to forego partnership so they can lead more balanced lives. For these lawyers, partnership is not the “promised land” but is, instead, a perpetual extension of the demanding life of an associate.

Generational attitudes. Partnership’s appeal has also fallen prey to the attitudes of Generation X. The members of this generation, born roughly between 1960 and 1980, view work-life balance differently from their baby-boomer predecessors. They want to have lives and interests outside of work, regardless of whether they have children. They often view partners, who’ve sacrificed their lives to be valued by their firms, as workaholics. Many Gen Xers aren’t interested in making the sacrifices necessary to become a partner—not only because of the long hours required, but because the payoff doesn’t seem worth it.

Implications for private practice. The reduced desirability and attainability of partnership may affect law firms’ profitability in a number of ways. First, it is likely that in coming years, fewer associates will compete for partnership positions. Because historically there was never room for all associates in the partnership ranks anyway, firms won’t necessarily run out of new partners, at least in the short term. However, just as consumers lose out when business competition decreases, firms may lose some of the benefits they experienced as a by-product of intense competition for partnership.

Once they have decided not to pursue partnership, associates are likely to continue the trend of leaving firms in their third through fifth year, when they are most marketable, rather than waiting until they are on the doorstep of partnership to make their decision (or have it made for them). Unfortunately, it is during these years that associates are most profitable. Typically, they have enough experience to work independently but are not as expensive as a senior associate or a junior partner. Even if such lawyers remain in their firms, they may not be as willing to bill as many hours or make as many sacrifices as they might have otherwise.

The situation might be simpler if the associates who are ambivalent about partnership were always the weaker performers. But that isn’t the case. Often, those who are willing to forego partnerships in favor of a balanced life are strong performers. In these cases, firms must consider new forms of incentives to motivate and retain these profitable lawyers. Ultimately, the firms that will prosper will be those that challenge old assumptions about the nature and allure of partnership and find creative ways to make work meaningful and rewarding for today’s associates.

Marian L. Carlson is an attorney and consultant specializing in attorney training and professional development. She can be reached at marian@carlsonperformancestrategies.com.

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