Best Practice: Law Firm Management - Excessive Collaboration

Asked and Answered

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

Q. I am a partner in a twelve attorney general practice firm in Upstate New York. There are eight partners and four associates in the firm. Our firm was formed five years ago when we broke off from another firm in the area. That firm was led and managed by a dictatorial founder and other attorneys in the firm including partners had no say in management matters whatsoever. When we formed this firm we decided that all attorneys including associates would be included in the decision-making process. All management decisions must be passed by all attorneys in the firm. When we were smaller this worked okay but now that we are larger we are having problems. I would appreciate your thoughts on the matter.

A. I concur that a collaborative culture should be a desirable goal. However, your approach takes too much time, wastes attorney time, takes too long for routine decisions to be made, and can lead to less than optimal results. I suggest that you separate management decisions into the following three categories:

• Major decisions such as formulation of strategy, approval of firm budgets, partner compensation, admission of new partners, termination of partners, approval of mergers with other firms, dissolution of the firm, etc.
• Management decisions such as managing cash flow, working with banks and firm's accountants, screening new lawyers, managing firm's cash flow, managing the firm's office manager/administrator, monitoring and evaluating performance of lawyers, and overseeing the firm's client development program.
• Day-to-day administrative decisions such as billing, management of support staff, facilities management, etc.

All partners will still have control of the major issues and be spared from the day-to-day management and administrative decisions. A managing partner or three member management committee can be elected to handle the management decisions and an office manager/administrator can be hired or promoted from within to handle the day-to-day administrative decisions. Associates can attend periodic firm meetings, service on ad hoc committees, etc.

An approach such as this can still preserve the collaborative culture and you have strived to develop and improve overall management of the firm.

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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 and author of The Lawyers Guide to Succession Planning published by the ABA. 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.