November/December 2019

What Keeps Small-Firm Managing Partners Up at Night?

Five small-firm managing partners discuss the issues facing their firms.

Debra L. Bruce

Many aspects of the practice of law have changed rapidly over the last 10 years. Have the concerns of managing partners of small firms also changed? At the request of Law Practice magazine’s editorial board, I interviewed five managing partners of small firms ranging in size from seven to 25 attorneys to see what they worry about and where they focus their time as managing partners.

The managing partners are:

  • Matthew Driggs of Driggs Bills & Day, also known as The Advocates, a 25-attorney firm with offices in Salt Lake City, Seattle and seven smaller locations in five states. The firm also has 80 staff members and focuses on personal injury work.
  • Debra D’Agostino of the Federal Practice Group, a 13-attorney firm in Washington, D.C., with eight staff members. The firm practices federal employment law, government contracts, military law and immigration law.
  • Miguel Danielson of Danielson Legal LLC, located in Cambridge, Massachusetts, and Fargo, North Dakota. His firm has 11 attorneys and two staff members. They practice intellectual property and technology law.
  • Mike H. Bassett of The Bassett Firm in Dallas, a civil trial defense firm. They have 10 attorneys and 17 staff members.
  • Raquel A. Salas Guzman of Avanti Law Group, PLLC, located in Wyoming, Michigan. They have seven full-time attorneys, two contract attorneys and 23 full-time staff. They practice criminal defense, immigration, employment law, family law and civil litigation.

Law Practice (LP): As a leader of your law firm, what keeps you up at night?

Driggs: I worry most about getting new clients. In personal injury you are always having to replenish your caseload. All my employees depend on me getting new cases, which is very difficult and competitive.

D’Agostino: The legal work itself is still on my mind if I wake up in the middle of the night. I will always feel the weight of having someone else’s livelihood in my hands. Luckily, having my own firm has also been a stress reliever. I have more control over the cases I take and my schedule.

Danielson: My two main concerns are client satisfaction and attorney happiness, which are highly correlated. Failure of one is likely to indicate a problem with the other. I worry about any situation where a client feels underserved or undervalued. A managing partner can only take on so much of the client relationship. The other attorneys usually have the most contact with a client, so making sure that the attorneys represent the firm as well as possible stays on my mind.

Bassett: Wanting to make sure that our firm—day in and day out—exceeds clients’ and insurance carriers’ expectations. Whether it is getting status reports in on time, or whether we have designated experts in a certain case, I tend to think about the 1,000 little things that must happen every day for our firm to thrive and grow.

Guzman: As managing member, everything keeps me up at night, not just one thing. I worry about deadlines and what is on everyone’s plate right now that impacts our practice and long-term sustainability. I’m concerned about whether all the parts are working well together in a busy, growing, high-volume practice. Up-to-date procedures and technology are key to efficiency and client satisfaction.

LP: Excluding billable work, what takes up the biggest chunk of your time?

Driggs: As the firm owner, I spend a considerable amount of time working on our systems. Making sure everyone completes his or her work in an efficient and productive manner takes a lot of energy. I also spend a lot of time on marketing to make sure we continue to grow the firm.

D’Agostino: General supervision of attorneys and staff, including monitoring marketing efforts, consultations and accounts receivable. I have found that employees are what matters most—when they’re good, the firm is good. But when someone is underperforming or a bad fit, the whole team feels it.

Danielson: Administrative duties required to run the firm: keeping invoicing and collections on track; managing attorney workloads and tracking projects, accounting and banking; marketing, etc.

Bassett: Reviewing other lawyers’ work, meeting with them on cases, training and mentoring lawyers, marketing, monitoring whether things get done and general “management by walking around.” In that order.

Guzman: Networking. As Linda Rank says, networking is “the intention of meeting like-minded people with the mutual benefit of supporting and sharing resources.” That has proven to be the most valuable resource in building any successful law business. 

LP: Excluding billable work, what do you believe are the most important things for a managing partner/shareholder to focus on?

Driggs: We should work on things only lawyers can do and trust staff to handle everything else. There are so many tasks our staff can become extremely proficient at, which frees up our time to make more money or get more clients.

D’Agostino: Marketing, employee engagement and performance, and reputation, all of which interconnect. With a niche practice, we rely heavily on internet marketing and referrals. We utilize a mix of fee structures, so we must assure there’s a balance between hourly and other fee arrangements.

Danielson: Any organization must focus on its culture to be successful. Our clients, who are largely fast-growth tech companies, spend a ton of time thinking about it. Culture is just as important for law firms but comes less naturally for most attorneys. What do you want workers and customers to feel when engaged with the firm? Creating that environment is a broad task with a lot of components. After doing great legal work, that is the most important focus.

Bassett: Setting the tone and environment. Setting expectations for team members, for where you want the firm to go and what you want the firm to look like. A leader’s worldview and energy get amplified as he or she wends from leader to lawyer to staff. It’s my job to reassure the team—mostly by actions but sometimes by words—that (1) our work makes a real difference in people’s lives, (2) they are a very important part of the mission, (3) we count on them every day to stand and deliver and (4) we appreciate all they do.

Guzman: Managing the business affairs of the firm. Success has come from keeping my focus on three main aspects: (1) continually developing and honing skills as a business owner, (2) expanding client development and (3) maintaining tight controls on spending. Without those things, even with brilliant attorneys, there would soon be no law firm. 

LP: What do you see as the main concerns for the future for law firms of your size?

Driggs: Once the owner/manager retires, many firms disintegrate. To build a lasting firm, you need to build out a company structure that runs without you. Owners who think they can do everything may end up losing everything.

D’Agostino: Clients often seek smaller firms that can offer more flexibility and a better value. It seems harder for small firms to reduce employee turnover, especially with younger employees who do not anticipate staying at one firm for more than three to five years. It seems that someone always needs training, which is tougher to handle with fewer hands on deck overall.

Danielson: For us, growing in a sustainable and healthy way is our main concern. We don’t want to grow for growth’s sake, but a larger size would allow us an opportunity to provide more, and perhaps better, service to our clients. However, what creates competitive advantage, and what is possible, for a smaller firm will not necessarily scale to a larger practice. There are things that any managing partner must figure out before sustainable growth to the next level is possible. That is not necessarily obvious or easy, however.

Bassett: Acquiring and retaining legal talent—from lawyers to good legal secretaries—in a business environment, in Texas at least, that is witnessing an influx of out-of-state firms and more firms merging. The effect is that salaries and benefits at those firms are generally higher than firms like ours can provide. When a firm is paying a midlevel legal secretary $80,000 a year, we can’t compete with that, nor do we want to.

Guzman: The interplay of providing the highest possible quality of legal services at the lowest price point possible, while ensuring the viability and profitability of the firm. Our office works with individuals, and our pricing structure is always evolving. It’s challenging when the salaries we would like to pay to our staff and attorneys do not align with what our core clientele can afford to pay. This is a never-ending concern that will continue as we battle with all the modern alternative options to legal service providers.

LP: What concerns do you have regarding succession planning?

Driggs: The only way succession works is if there is value in the firm after the owner/rainmaker is gone. Most of a firm’s value is in its ability to attract and retain great clients. Remaining attorneys who believe they are the reason the firm has value often break off and take clients without paying anything to the firm. If you can build a brand that attracts clients more than individual attorneys, you will hopefully have something to sell when you’re ready to retire.

D’Agostino: Overall, we are a very young firm, with most partners between the ages of 40 and 44, most associates between 25 and 35, and most staff under or around 30 years old. Currently we are more focused on covering family leave and trying to allow for work/life balance than on succession planning, which is not a top priority right now. Many of our direct competitors are headed by lawyers nearing retirement age. We are trying to best position ourselves to fill in the voids that will be created in the marketplace, with an eye toward growth.

Danielson: Our firm’s leadership is quite young, so we don’t think all that much about succession planning right now. However, we do certainly want to build systems and procedures that account for the inevitability of retirement for our partners. I think, in general, partners would like to create systems that allow them to benefit from the revenue they originated, without requiring a bulk of administrative or even billable work for themselves. That applies both in the present and in the eventual future of a decreased involvement with the firm or retirement. So these are challenges we look at now and will look at more so as our leadership nears retirement age.

Bassett: This is a great and timely question. Our firm has been wrestling with this topic for a couple of years. My biggest concern is, Where do I start? As someone whom clients hire to strategize and solve problems, this whole area of succession planning seems like a Gordian knot to me. My main concern is that I know this is an issue we need to address and slowly work our way through, but I have no clear idea of the next action steps to make it happen.

Guzman: Our firm has been very proactive with succession planning. Because we have three founding members, we have both a very detailed operating and employment agreement with the firm. These agreements provide for insurance to cover the funds to hire a key attorney at the passing of one of us, as well as funding to pay out the heirs of the passing member. Our firm also has procedures in place that are to be activated upon the passing of one of the founding members.

LP: We extend our gratitude to these busy managing partners for taking time out for the benefit of other small-firm owners and managers to share their experiences, perspectives and concerns. 

Debra L. Bruce

Debra L. Bruce is president of Lawyer-Coach LLC, which focuses on leadership, management and productivity. Capitalizing on 18 years in law practice and 20 years coaching, she helps lawyers adapt effectively to unprecedented changes occurring in the legal industry. She serves on the Law Practice Management Committee of the State Bar of Texas and is co-chair of the Productivity & Knowledge Strategy Committee of the ABA Law Practice Division. debra@lawyer-coach.com