Best Practice: Setting standards for associate performance
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am the managing partner of an eight attorney general practice firm in Chicago's western suburbs. We have five partners and three associates. For years, it was just the five partners who started the firm together. In the last three years we added our associates. We are not making money from our associates and wondering what we need to be doing differently. One associate is logging 925 billable hours, one is logging 1,200 billable hours, and the other 1,400 billable hours. You thoughts are welcomed.
A. If these are full time associate positions and they have been with your firm a couple of years, you should be getting 1,600-1,700 billable hours per year. If your firm does litigation - 1,800+ billable hours. Some practice areas such as estate planning/elder law fall in the 1,500-1,600 hour area.
The starting place is setting expectations. During interviews with associate attorneys at client law firms I ask - what is your billable hour goal/expectation, etc. Frequently I am told that they have no idea or they tell me that they think that the expectation is such and such. Other times they advise me that the firm simply does not have a billable hour expectation. Of course, the partners tell a different story and can't believe their associates are not clear on billable hour expectations.
Some firms put in place auto pilot type incentive bonuses based upon hours or dollars and believe that these bonuses in themselves will motivate performance and as a result billable hour expectations are not needed. Often this is simply not the case.
I believe that baseline expectations should be spelled out and measured monthly. These baseline expectations are the minimal requirement to remain employed and justify the base salary that the associate is being paid. If these baseline expectations are not being met, you must have some heart-to-heart discussions in real time. Outline the problem and consequences for non-compliance.
The billable hours your associates are logging just won't cut it. If the work is there they simply must get their hours up to desirable levels. You might look into the reasons for the low hours - work ethic, time management issues, or problems with timekeeping. If there is not enough work - long term - you may have to consider reducing the work hours that you are paying for.
It sounds like you may not be adequately mentoring or training your associates. Consider performance reviews and active mentoring and coaching. Insure that you are providing adequate feedback to your associates. Your time investment in the short term will pay dividends in the long term.
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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.