Partner's Report for Law Firm Owners

It’s a simple truth: Happy clients don’t leave their law firms. Yet partners know that the converse is fact, as well: Dissatisfied clients don’t refer work to your firm (key, since most law firms rely heavily on referrals), eventually take their work elsewhere, and—here’s the kicker—damage your firm’s reputation with prospects.

The economy notwithstanding, lateral partners are still in hot demand, as law firms look to garner heavy hitters with specialization in hot practice areas, connections, and (most importantly) portable business. Competition for the best and the brightest, of course, is fierce.

Partners can file this one under the "believe-it-or-not" category: The pace of law firm combinations was up sharply in the United States in the second quarter of 2008.

America may or may not be in a recession; opinions vary. However, ask any law firm leader or managing partner and he or she will tell you that something is going on, not only in relation to the economy, but also with regard to people and their response to the downturn.

Layoffs and cutbacks are commonplace, but law firm owners must take action to retain top talent as well. "Despite a cautious economy, demand for attorneys, paralegals, and legal secretaries with the most sought-after practice area expertise is outpacing the current supply, a trend that will likely continue," says Charles Volkert, executive director of the staffing firm, Robert Half Legal. "Law firms and legal departments are implementing policy changes to bolster recruiting efforts, limit staff attrition, and grow their business in an increasingly competitive landscape."

What’s your firm’s partner compensation spread and should you really care? Law firm owners generally make an enviable living. However, in some large firms, the top earning partner takes home 15, 25, or even 35 times more than his or her peers do.

Five ways to propel your law firm through the economic downturn and prepare for even more success:

Seven simple ideas to help law firm owners create or update a marketing plan. Even if you’re starting from scratch, you and your partners can develop a viable plan. Ask these questions:

Partners can avoid common issues relating to salary compression. Salary compression, as a concern, has grown way beyond the confines of human resources’ standard operating procedure to become a major factor in recruitment, retention, and staff morale.

What you and your partners should know about the firm’s top competitors. Learning about them and what makes them tick is one part of being in a competitive marketplace. Of course, you need to stay current with the market so your firm can continue to profit and grow. The ideas below can help your firm do just that:

Can this approach help law firm owners hire associates who are better prepared for the business of law? At a plenary session hosted at the recent 2008 National Association for Law Placement (NALP) conference in Toronto, entitled "The Future of Law Practice: Trends, Predictions, and Imperatives," panelist Jordan Furlong, editor-in-chief of National magazine of the Canadian Bar Association, spoke glowingly about the third-year curriculum being created by Washington and Lee University School of Law.