My latest column in Law Practice Magazine (July/August Big Ideas Issue) is all about preparing for partnership. If you aspire to law firm equity partnership, the article includes some things to think about in several different areas.
Here are some highlights:
Mindset
As an associate, your focus is on yourself - your work and your own clients. But as an equity partner, you become responsible for the whole firm and everyone in it. You are no longer responsible just to your clients, but to all of the firm's clients.
You have to take a broader view of the business and your day-to-day work than you would as an associate.
Business Development
As an equity partner, your role within the firm is very different than your role as an associate, or even as a non-equity partner.
When you are an equity partner, as an owner of the firm, your main responsibility is to ensure that the firm continues to generate enough revenue to continue operating. As a result, one of the expectations of law firm partners is that they drive business to the firm—and you’ll have to generate enough business not only to keep you busy but to provide work for others.
Management Responsibilities
Part of your responsibility as an equity partner is the management of the firm. That means your workload is likely to grow to include things like administrative and nonbillable tasks, such as supervising associates, conducting performance reviews, hiring and firing, reviewing client bills and strategic planning. You will have to learn to be an excellent delegator.
As a leader of the firm, it is your job to help uplift, inspire and foster the growth of the firm’s employees.
Financial Considerations
Perhaps the biggest change when moving from associate or non-equity partner to equity partnership is in the area of finances. As an equity partner, you will be directly responsible for the firm’s financial health. You will need to understand how the firm works and understand its financial picture so that you can make informed business and financial decisions.
In addition, your compensation structure will change dramatically. Instead of reaceiving a guaranteed salary, your compensation will be tied to the success of the firm. In some years, that may even mean that you make less money than you were making as a senior associate or a nonequity partner.
In addition to a less predictable income, as an equity partner, but you may have to wait longer to get paid. You may not receive distributions frequently, which may mean waiting for a large portion of your compensation until the end of the quarter or even the end of the year.
Are you ready for the changes equity partnership may bring?
ABA members (and those who haven't reached their article limit) can read the column here.
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