Best Practice: Law Firm Governance - How does adding an administrator change structure?

Asked and Answered

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

Q. I am a partner in a nine-attorney firm in Topeka, Kansas. There are three active partners in the firm. For years, day to day management has been the responsibility of a managing partner that we appoint from time to time. We have just hired our first firm administrator, who is experienced and has worked in other law firms. Should we continue to have a managing partner or consider a different structure?

A. Typically firms your size that have professional firm administrators empower the firm administrator to manage the business side of the law firm and have either a managing partner, management/executive committee, or all partners manage the client service side of the practice. The firm administrator typically reports to the managing partner, management/executive committee, or all partners. In essence there are three levels of management - the partnership which services like a board of directors, the managing partner or management/executive committee that oversees the professional side of the practice, and the firm administrator that manages the business side of the firm.

I find that in firms your size with firm administrators, a three member management/executive committee is more common. Since your firm only has three partners - initially your management/executive committee would be all three partners. As you add more partners you would move toward electing your management/executive committee.

While either form would work in your situation - I suggest you consider eliminating the managing partner position and having the three partners serve as the management committee and have the firm administrator report to that group.

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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.