The Role of A Managing Partner in a Small Law Firm

RJH Consulting

By: Krystal Champlin

(Reprinted with Permission of Legal Economics)
By Robert James Henderson-1988

I have been practicing law in the same firm since graduating from law school. During that time, my practice had been devoted almost ex­clusively to personal injury litigation. I was content to let others manage the firm while I “did my thing” as a trial lawyer. I was convinced I wasn’t cut out for management, and I thought the job of managing partner would be a headache, anyway.

Almost four years ago, with no warning or preparation, circumstances made me the managing partner of my small law firm, then composed of seven partners and two associates. Typical of many others, our firm had been managed very capably for many years by a senior partner, who was then about 70.

Prior to the time I joined the firm, our managing partner had originated most of the insur­ance company clients which were the backbone of the practice, and he surrounded himself with a group of very capable younger lawyers. The management of the firm was essentially on the “advice and consent” basis, mean­ing the junior partners had little participation in the decision-making process, except for very major decisions. Usually, we heard of the decisions after they were made.

This system worked well for many years, but when it came time for our long-term senior partner to step down as managing partner, it created chaos for the other part­ners. Suddenly, the various management functions we all had taken for granted so long were our responsibility. No plans had been made for the change-over, and no one had given any thought to what the proper role of the manag­ing partner should be. As might be expected, the transi­tion in leadership was extremely difficult, and we more or less drifted for a period of time.

About a year and a half after our senior partner gave up the job, it was decided I would become the managing partner. I had no experience for the job, and there was no job description to guide me. My first six months were a nightmare. For the first time in my life, I had to deal with such unfamiliar and difficult problems as hiring and supervision of personnel, cash flow management, ac­counting, management and motivation of partners and associates, etc.

Hoping to get some help, I attended several seminars on law office management. Most of them seemed geared to larger firms which can afford more sophisticated man­agement systems. In our eight-lawyer firm, the job of managing partner has to be part-time. I really don’t feel the so-called “experts” on law office management fully understand or appreciate the unique problems of small law firms, since they aren’t practicing lawyers them­selves.

After several painful months of on-the-job training, I decided my partners and I should go on a retreat in order to do some planning for the future. Most of the experts recommend having an outside facilitator conduct a law firm retreat, because the presence of an outsider helps keep the discussion moving productively. I agree, but nevertheless, I decided to plan and conduct our retreat myself, because of my concern that I wouldn’t be able to find a person who understood the unique problems of managing a small firm like ours. We now have retreats on an annual basis.

As a result of my experience in conducting retreats for my own firm, I have been offering my services to other law firms for the last year or so as a facilitator for their retreats. One of the things I do in preparing for a retreat is have all the partners answer a lengthy questionnaire covering, among other things, how the business of the firm is managed, and any special concerns the partners may have. One of the questions I hear most frequently from members of other firms is, “Should we have a man­aging partner?”

Most small law firms (15 or fewer partners) give little or no thought to managing their business (yes, a law firm isa business). As a matter of fact, many do very little actual managing of their businesses at all. Their excuse is that they are too busy practicing law, and they consider themselves poor business people. Most firms I have con­sulted with have some type of management system with which no one is satisfied fully.

In many firms, one of the partners – usually the one with the most seniority – reluctantly attempts to juggle the management responsibilities while trying to carry on a full-time law practice. Usually, both suffer. Other firms try to manage their business by a committee composed of all partners, or a group of senior partners. With this type of committee system, there is no centralized control. Even worse, each and every decision involves endless expendi­ture of the valuable time of the partners, deciding every­day details with which they shouldn’t have to be con­cerned.

Many smaller firms feel it is more “democratic” to manage the firm’s business by committee. As I said, this is a terribly time-consuming and costly way of doing business. In our firm’s transitional phase, for example, we spent most of one meeting discussing the “critical” sub­jects of whether the parking spots in our lot should be striped diagonally or straight, and the selection of pic­tures to be hung in the reception room!

I have talked with members of a number of firms which don’t have a managing partner. They usually say either no one wants the job, or they don’t have anyone who is a “leader.” I believe these are just excuses for the failure of smaller firms to come to grips with the issue of proper management. It’s hard to believe a law firm composed of, say, eight partners wouldn’t have anyone with the neces­sary leadership qualities.

Regardless of what management system they have, without strong centralized leadership at the top, most small law firms don’t take the time to think about long-term goals and objectives. Even if they do, they don’t know how to go about the planning process to establish and achieve their goals and objectives.

True, lawyers – particularly in smaller firms – fre­quently are not good business people, and there definitely is a common reluctance to get involved in management. Unfortunately, this is a luxury small law firms no longer can afford. It’s a highly competitive business today, and law firms can’t afford not to have well-defined goals and objectives and good, sound management. Law firms which refuse to keep up with the times will be left by the wayside.

One of the main reasons many people don’t want to be a managing partner is the common perception that the job is a big headache. It follows that if the job is perceived to be a headache, it probably will be. But if it is handled properly by the person chosen to be managing partner as well as the other partners, it doesn’t have to be a head­ache. As a matter of fact, I have found the job very rewarding, in large measure because my partners had the wisdom to give me my “head” in making all but the most important decisions, and in giving me their full encour­agement and support.

Based on my own experience as well as my observations of other firms, the ideal managing partner for a small law firm would be someone in his or her early 50s, at the height of the productive years, and still not too old and hidebound to entertain new ideas. The job should not be appointed solely on the basis of seniority. It should be someone who has the respect of the other partners and whom they recognize as a leader. It also should be some­one who has a vision of the future. The partners should give the proper authority, prestige and respect to the role of managing partner. They also should give him or her more clout by providing extra compensation in the form of a monthly management fee. It’s an important job, and people tend to give more respect to something they are paying for.

Being managing partner will cut into a lawyer’s billable hours, and this is something the partners should recog­nize and expect. However, by the time a person becomes managing partner, he or she should have gained sufficient stature in the profession so that his or her billing rate is high enough to compensate to some extent for the decline in billable hours.

The role of a small law firm’s managing partner should include the following:
  1. Leadership of the firm in terms of the motivation of partners and associates.
  2. Guidance to the partners to come to a clear consensus as to the directions and goals of the firm.
  3. Once the firm goals and directions are established, follow-through to get them accomplished.
  4. Day-to-day management oversight for the firm.
  5. Supervision of the office manager or administrator if there is one, and/or supervision of the clerical and ac­counting staff.
  6. Training and supervision of associates.
  7. Coordination and direction of marketing efforts and relations with firm clients.
That may sound like a tall order for someone attempt­ing to carry on a full-time law practice. But it doesn’t have to be, if it’s handled properly by all concerned and is perceived as a position of honor and respect. On the other hand, if the position of managing partner is perceived as an undesirable job or a headache, chances are the job won’t get done properly.

Legal Economics May/June 1988

Robert James Henderson © 1988

Robert James Henderson was the managing partner of Luce, Henderson, Bankson, Heyboer & Lane, P. 0. Box 944, Port Huron, Michigan 48061. In addition to carrying on a full-time law practice, he provided management and planning consultation for small law firms and acted as a facilitator for law firm retreats.
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