Best Practice: Law Firm Staffing and Growth Models - Lateral Partners & Of Counsel

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Two weeks ago I was asked by the managing partner of a 16 attorney insurance defense firm about staffing and growth models for an insurance defense firm and I listed the following models and discussed the first model – Grow Your Own Associate Staffing. Last week I discussed the second and third models - Lateral Associate Staffing and Contract - Staff Associate Staffing.

Attorney staffing/growth models include:

1. Grow Your Own Associate Staffing
2. Lateral Associate Staffing
3. Contract - Staff Associate Staffing
4. Lateral Partners (Equity or Non-Equity)
5. Of Counsel (Various Approaches and Purposes)
6. Mergers (Or Small Firm Acquisitions)
7. Branching

This week I will outline the pros and cons for number 4 and 5 - Lateral Partners (Equity or Non-Equity) and Of Counsel.

Lateral Partners (Equity or Non-Equity)

PROS

1. Maybe a quicker way to increase profitability and cash flow.
2. Allows the firm to acquire talent that it may not have time to grow or develop.
3. Allows the firm to expand into new areas if the candidate has said experience and brings a book of business with him or her.

CONS

1. Desired compensation may not fit within the firm's existing compensation structure.
2. Clients may not come or materialize.
3. May be issues with cultural fit.
4. Costs may not be justified.

Of Counsel - Various Approaches and Purposes

1. Allows the firm to acquire partner level talent, business, etc. without offering partnership.
2. Provides the firm with a way to acquire a practice of someone wanting to retire.
3. Provides the firm with a way to pilot test new lateral partner candidates and evaluate in a first-phase approach.
4. Provides the firm with a way to partner with other firms.
5. Provides a way for the firm to enter more new market areas.

Other models to be discussed in upcoming posts.

Click here for our article on hiring associate attorneys

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John W. Olmstead, MBA, Ph.D, CMC,(www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.