LAW
PRACTICE
MANAGEMENT
Changing Partners: Comparisons to Your Current Situation By Jerry Schwartz
At this time of the year many partners get restless with their current partnership arrangements. The causes may be many, however, leadership and finances are generally the two prime reasons for discontent. Partners begin to look elsewhere or firms that are interested in expanding may show an interest which fuels the restlessness. Regardless of whether the causes are internal or external, certain areas should be investigated before the partner makes a decision to move to greener pastures. James Larry Green, an author and speaker on law office management topics, ou tlined some of the following areas of concern for consideration; COMPE SATIO SYSTEM Determine whether the compensation system at the new firm is an objective or subjective system. If the system is objective determine what criteria are used in the process. It is important that you fully understand the criteria and that the firm has a reporting system for you to review on a periodic basis to determine your progress. If the system is subjective, determine who decides
and who tends to reap the rewards of the system. Always examine the system personally. Don't leave your compensation to someone's interpretation of the system. FINANCIAL STATEMENTS AND MANAGEMENT REPORTS Exa mine the financial statements of the firm for the past few years. If the firm does not have monthly financial statements, it is difficult to determine the financial strength or weakness of the firm. A substitute for the financial statements is the annual tax return of the organization. It will provide you with some information on the financial condition of the firm. A firm that does not bother to produce monthly financial statements is not taking care of the business side of the practice and should be looked at very carefully. Management reports should also be reviewed to determine the amount of hours worked, billed and written off by the various lawyers. The current work in process and aged accounts
receivable should be examined to insure that these two major assets are being properly managed. If there appear to be problems in these areas then the billing system may be weak which could affect your compensation under both a subjective and objective compensation system. INTER-PARTNER RELATIONS AND MANAGEMENT Review the minutes of partner meetings to determine that all partners participate in partnership meetings. Are significant issues discussed at meetings or do the partners dwell on the minor issues? Check for unresolved topics, which is an indication of philosophical differences among the partners or failure to deal with tough issues. Find out who is in charge and whether that person's philosophy is in line with your own philosophy of managing the firm and the practice. OPERATIONS Closely review the physical plant of the firm. The public areas of the firm must portray an image that will satisfy your clients. The offices, conference rooms and