October 23, 2012

Ask Bill

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In Up or Over

Making Partner

It's Up or Out No More as Alternatives Shake up the Traditional Partnership Model

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Advice for an associate considering the leap to solo practice.

by K. William Gibson

Q.  Bill, I am an associate at a law firm and it looks like partnership isn't in the cards for me. I've been mulling over my options and I am thinking about going on my own. Any advice?

A.  The law business has changed and making partner isn't what it used to be. More and more associates are in your situation and considering their next moves. Just after I got your question, as it happens, I had an arbitration hearing with a young lawyer named Gretchen Mandekor. She recently left an associate's position at a law firm to start her own solo practice. I think her story might be of help to you.

After finishing law school at the University of Oregon, Gretchen decided to begin her legal career in a small town in southern Oregon. She took a job as an associate with a small, well-respected insurance defense firm and spent just over one year there getting a lot of litigation experience. She loved the firm and would have stayed longer but for the lure of the city. She moved to Portland and went to work for one of the state's largest firms. After three years there, she decided that she preferred a smaller firm, one more like the one she had worked at in southern Oregon, so she went to work for another highly regarded firm, one that had a large insurance defense business but was growing into other areas of practice. Gretchen spent three years there and was on target to make partner when she made the move to solo practice a couple of months ago.

I spoke with her about what it was like to be an associate in those three firms and how the possibility of making partner (or not) was a factor in her decision to leave.

It became clear in our discussion that Gretchen didn't like the "politics" that go on in law firms. In her view, being good at politics is important for associates who want to become partners. She admitted, though, to having a more direct style than the average associate and I got the impression that she did not necessarily consider that to be a trait that gets people on the fast track to partnership.

In her view, "The best thing that an associate can do to make partner is get attached to a partner who has a good book of business and get to know those clients." The two Portland firms where she worked had especially begun emphasizing practice group marketing. Weekly collegial breakfasts, she reports, were replaced by practice group marketing meetings. Associates were expected to spend time developing their own client bases, while still getting their quota of billable hours. At the same time, she noted, being a good marketer was not a guarantee of partnership.

What's more, when a partnership offer finally came for an associate, often it was for nonequity partnership, meaning that the associate's name went onto the partnership's letterhead but he or she did not become entitled to share in firm profits. "In many cases, associates' salaries actually went down when they made partner," Gretchen says, because they were no longer in the associates' bonus program but did not get a slice of the bigger pie either.

"I looked around and saw that most associates were really unhappy," she recalls, "and partners weren't that much happier." She saw young lawyers who made a commitment to work 5 or 10 or even 15 years for six or seven days a week with no guarantee that they would ever make partner—and even if they did, it wasn't what they had been expecting. Not only that, but even though their salaries were good, they did not seem great in light of the hours they worked and the sacrifices they had to make. In Gretchen's view, most associates stay because of "fear and hope"—fear of not being able to match their salary by doing something more satisfying and hope that a partnership will bring greater happiness.
Gretchen felt that she was a year or two from being offered partnership, and that potential offer was actually one of the factors that caused her to decide to go out on her own. "I knew it would be harder to leave after they made me a partner," she says, so she decided to leave before any offers were made. Fortunately, she had developed relationships with insurance company clients beginning with her first job in southern Oregon. One of those clients heard she was moving to Portland and sent her some business. That client has gone with her to her solo practice. A paralegal from her old firm also moved with her and assists in her new practice.

Gretchen says she has plenty of work to keep her busy. In addition to the insurance defense work, she handles employment law cases, both for employers and employees, something she learned at her first job.

With two small daughters and a "stay-at-home husband," the pressure is on, but Gretchen seems to relish the challenge. We met at her office—a small house on the Columbia River that she converted into her workplace and where she can stroll along the river or look at the sailboats when she wants to get away. With no politics, no marketing meetings, no billing quotas and no more worrying about making partner, she seems excited, upbeat and as happy as any lawyer I've talked to in quite a while. (For more about lawyers who've made the leap to solo practice, see Law Practice's January/February 2007 issue.)