Thinking Like an Owner

The magic words that every associate wants to hear from a partner is that the associate is now “thinking like an owner”. These words mean that the junior lawyer realizes the difference between being an employee and becoming a partner in a professional services firm. It means that the associate has grasped the difference between a partnership structure and a corporation. 

Many young lawyers starting out believe that being smart, skilled and working hard will naturally lead to partnership. While this may lead to promotions within a corporate structure, in a professional services firm such as law, accounting or consulting, every partner is an owner not an employee. This means business development and revenue generation is the necessary key to partnership. However, the opportunity to become a partner has many other variables outside the control of both the associate and the firm. 

The economy may impact business, a partner may leave and take clients with her or a major client may suddenly switch firms – all events that may not be within the firm’s control. The associate may now be in a practice area where there is not sufficient work to admit an additional partner or even retain a senior associate.

When the senior associate is let go, they are sometimes bewildered when they see a less experienced associate brought in to replace them. The answer is, of course, that the partners must keep the work affordable to the client and need an associate at a lower hourly rate. The more senior associate’s hard won experience has worked against her when the work dries up and keeping costs down becomes a priority.

Younger associates then ask me why the firm doesn’t simply move them to another practice area where they see there is so much work that the partners and associates are working very long hours. Again, the answer may lie in the higher hourly rate that the more senior associate carries. It costs the firm money to train a more senior associate in the new area of law when the junior work could be done at a lower hourly rate.

In addition to the economics of running a practice, there is also the more subjective assessment of “fit”. Any aspiring partner is assessed not just on skill, business development capability and revenue generation but also on whether they will work well with the others in their practice group and the firm as a whole.

So what can young associates do to improve their chances of becoming a partner when there are so many variables over which they may have little control? Additionally, if partnership is not offered, how can an associate ensure that she will find another job? Associates should focus on four things. 

1. Marketability

   It is important to maintain your marketability both within the firm and outside in the event that you are not made an offer of partnership. This means acquiring as many skills as you can through professional development courses and work experience.

   Professional development should not be limited to technical legal skills. Training in finance, public speaking, negotiation or business skills make you more employable with a law firm or in the corporate world. Similarly, experience gained by sitting on boards or volunteering on CBA sections or committees broadens your technical and leadership skills and enhances your partnership prospects as well as your marketability.

   You must get to know partners outside your practice group and gain more diverse experience. Many associates work in a narrow area of law that limits their marketability. The firm may, understandably, be reluctant to let a badly needed associate work with other practice areas in the firm. The associate should lobby as hard as they can to ensure they acquire broader legal skills.

   The other obvious advantage in getting to know partners outside your practice area is that it increases the number of partners who can speak positively to your application for partnership. It is better to have many champions over just a few.

2. Feedback

   If the firm does a poor job in giving feedback at your annual performance review or as is common, you do not receive a performance review, you need to ask for frank feedback from as many partners as possible.

   Law firms, unlike many corporations, often neglect good management practices to develop their associates through performance reviews and career development sessions. Few lawyers are trained in management and even where the firm has performance reviews in place, often the feedback can be minimal to none.

   In addition, a partner uncomfortable with giving critical feedback may tell the unwitting associate that everything is fine and she is on partnership track with nothing to worry about. The associate can then learn, mere months later, that there are serious concerns with her work. It may now be too late to address the concerns as a decision has already been made to let her go.

3. Networking 

   In order to remain marketable, you must stay connected with other lawyers outside your firm through the CBA or other bar associations. You should not stay isolated within your firm. This will make you a better lawyer and enhance your partnership chances as well as give you a list of contacts should you need to look elsewhere for work some day.

4. Business development

   There is no better guarantee of job security or becoming a partner than having your own clients. Ultimately, it is your clients who keep you employed not the firm. While some partners are fed work from other partners in the firm where there is a large corporate client, this still does not replace having your own clients whose loyalty is to you and not the firm. 

Associates must take charge of their own careers right from the beginning. Leaving your career prospects to your law firm exposes you to too many variables outside your control. Paying attention to the practices mentioned above will not guarantee you a partnership but it will increase your marketability both within and outside your law firm. Thinking like an owner is the key to success in the private practice of law.