Law Firm Partnerships are Bad Business

The system is broken and I am not the only one to notice. The ABA’s own surveys show that 80% of all consumers of legal services feel that their situation was either not helped or in fact harmed by the legal services they received. Our current delivery methods must go the way of the Dodo bird, powdered wigs, being out of touch and the VCR.

I have spent years making improvements within the confinement of the current system, big and small law firms. Yet the wine is sour; “if the wine is sour, throw it out.” It is clear there are better foundations to assure quality of life for legal services professionals and quality of services to customers.

Partnerships make lousy business structures because they are emotional relationships. The current incentives for Associates are lousy. They are employees but because the system motivates them only toward partnership, not compensation and craft, they are judged on personality as much as writing quality (wrong on so many levels). Owners are not employees and not all employees need to be owners to be assets. Yet if an “associate” is deemed to not fit the cultural mold they are denied “partnership” and asked to leave. (talk about eating your young)

Everyday legal partnerships are founded (LLCs are partnerships set up in sheep’s clothing) without any voice to the contrary. Who is up for a fundamental shift?

Written By:Jonathan On January 3, 2016 01:41 PM

Jack -

I don't know anything about you, but I think you might have missed this one. Think of Florida State in the 90's - wide right.

First, the system is not broken. The system works better than any other system in the world. Next you are going to post that we need tort reform, right?

Second, your statement "The ABA’s own surveys show that 80% of all consumers of legal services feel that their situation was either not helped or in fact harmed by the legal services they received." is taken out of context. 80% of consumers may not have felt they were helped, but where did the study say that was from law partnerships?

Third, you wrote "It is clear there are better foundations to assure quality of life for legal services professionals and quality of services to customers." Why is it clear? What are the better foundations? There is quality of life for many legal services professionals. Go ask Kevin for a link to Grant Griffiths numerous blogs. Grant has a great quality of life. Many attorneys enjoy a quality of life that surpasses other professions. Go talk to some CPAs during the Arthur Andersen et al mess. As for quality legal services, they are provided on a daily basis in this country.

Fourth, a good partnership is not emotional at all. It is founded on a strong business background.

Fifth, even if a parternship is emotional, so what? I dont know if you have practiced law or not. If you have, you would know that emotion is a good tool. If you have not, please do not comment on my profession until you have walked a mile in my shoes.

I think that is enough for now. There is more, so if you want to talk about it, let me know. My email is attached and Kevin, who does a great job designing blogs, knows how to get in touch with me.

Written By:Jack Casey On January 3, 2016 05:36 PM

Jonathan,

No tort reform here ;-) Call me an idealist but just because we have the best system in the world does not mean we hang our hats and pat each other on the back with a contented smile. Okay, we have the best system in the world for a lot of things. But think Detroit in the 1970’s… wait think Detroit today ;-) Just because we made the best cars in the world it did not stop Japan from kicking butt. Just because we have the best University system in the world it does not mean China is not making some pretty healthy dents to challenge us.

Okay, so you bit the tag line and missed the meat. I will have to improve my writing style. I used the survey to reveal the effect, the symptom, of a broken system. You know it’s a complicated mix of issues. But I find it hard to believe you don’t see it too. You and I can both point to hundreds of cases where law firms, lawyers and clients all live in peace and harmony. Money is being made, vacations are abundant and clients happily pay for the services they received. That is not the measure of the “system”. No more than saying the bottom feeders of the legal profession and the less then honorable people out there who try to use the law for greed instead of right, represent a failed system.

It is clear that there is a better foundation because the free market is telling us so. Capitalism does not exempt lawyers. Attorneys are “selling” a “service”. You can dress it up in marble halls or with a Main Street shingle and the angel of capitalism will still darken your door. The only way that I have faith in the delivery of legal services, as a business and not a hobby, is in the tried and true structure of a true corporate format.

If on one end of the scale you have a true partnership and the other you have a true corporation, then my point would be that the most successful legal services business must move as far away from a true partnership and as close to a true corporate structure as “legally” possible. I say legally because the legal “guilds” are standing in the way of the exact medicine the market needs to heal its walking wounded, which I suspect you would agree with given your statement “…founded on a strong business background.” I suspect you also know that there is a huge population of men and woman out there practicing without the net of a “strong business background”. It is because of this very large group in our industry I say the system is broken. These men and woman would provide excellent legal services and benefit our society greatly if they were not told in order to “practice law” you have to also be an “owner”. I say this is by far the greatest misjudgment of the partnership system. It burns out some of the best legal talent for no good reason. There are plenty of excellent lawyers who should be “employees” period. Where in the partnership system is their place? After 6 or 7 years they are forced to be owners or get out. Then they have the option to be owners with their own shingle or quit the law. (yes, I know a small subgroup can go in house. But you know there are few in-house jobs compared to the size of the need the partnership system creates)

I have more than a mile under my belt. I started as a boy watering the plants and taking out the trash. I have been a receptionist, a court runner, an office services clerk, a secretary, a paralegal, a law student, a law clerk, an HR manager, an office manager, and more. I have managed multiple offices in multiple states with medium and large law firms. While earning my bones I went to night law school and earned my JD. I have Director level miles under my belt managing, merging, growing and winding down law firms in the frenetic days of Silicon Valley. Brobeck; Skjerven Morrill; Shepperd Mullin; Ropers Majeski; Lanahan & Reiley were my laboratories and my life. I have stood toe to toe with alpha bulls and marquee attorneys on issues both operational, strategic, ethical and unethical. I have earned my voice and my own shoes.

The blog environment has attracted me and I am excited by it. I want to thank you for taking the time to write and disagree. I also want to thank you for helping me clarify my own thoughts. I expect I will evolve a lot through this experience with the help of people like you. Some of my thoughts will change; some will become even more resolute. On the issue of the partnership structure I suspect that we would not be far apart in the end. But we would be just far enough apart to have some fun ;-)

Happy New Year to you Jonathan and truly thanks for the feedback

Jack

Written By:Jonathan On January 3, 2016 07:59 PM

Jack -

While you are entitled to your opinion, please don't tell me that you have walked a mile in my shoes until you have practiced law. There is a difference between being a lawyer and being an administrator. Running a business is comparatively easy to running a business WHILE practicing law.

For example, as an administrator it is easy to come up with a marketing plan. As a lawyer, I have to be concerned about my ethical obligations so as not to lose my license. (I know you will say you have those same concerns, but let's be honest -you screw up and you can get another job. I screw up and its my license.)

Another example. You don't have the crying client to deal with. You don't have to explain to someone that his father has been killed and the person who killed him in a motor vehicle collision was an irresponsible SOB who has no insurance. I guess this would be a bottom 10% case for you, but for me, there is more to it. I may not make a dime on the case. Hell, I will probably lose money on the case. But,that is okay because at the end of the day, my job is not about dollars and sense. It is about showing one family that there is someone out there who gives a damn about their father. I assure you it never gets any easier speaking to the family of someone who has died. As an administrator, you never have to do that.

You also had the luxury of working for big firms. Big firms do things differently than the rest of us. You can not understand the life of a sole practitioner because you have never had the pressure. And despite "Law Firm U" or whatever your business is called, you won't. After all, you have the backing of Casepost. Some of us who blog about law practice management have nothing behind us. We speak from experience as lawyers and administrators. There is no cushion, no fall back position. Every day that I work (and that is every day) it is just me out there.

Finally, I know you have this thing about law running like a corporation. Let me share with you that your vision of a corporation is different than most. I suggest you spend some time reading blogs from some people who have been in the trenches. I highly recommend Carolyn Elefant's Myshingle, Jim Calloway's law practice management tips, Grant Griffiths and anything he writes. You might also want to go back and read my blog.

I hope you reconsider your position on the law, the bar associations and the practice of law - especially if you want to make it as a consultant to lawyers.

Written By:Jack Casey On January 4, 2016 09:24 AM

Jonathan,

I am taken aback by you making your disagreement with my thoughts a personal attack. I will not engage this far a field from the topics at hand. I accept that you don’t have anything to learn from what basically sums up to be a “half-breed” in your eyes. Your examples and tone, for your opinion, are on their face too emotional to be reasoned with. My path in life is not immune to the “inhumanity of man” and is no less up to the task than yours regardless of your view. You dismiss the very premise of my blog “…this thing about running like a corporation.” The premise, by the by, neither in its philosophy nor in practice offends the primacy of the client.

The “cushion” you have created and attributed to me is flattering, in that it assumes that my success has made me impervious to the realities of the world. However, as you go on to say “– especially if you want to make it as a consultant to lawyers.” confirming that the attribute is not true; not for me or any consultant, by definition.

Jack