How do you know when it is time to let a partner go? It is common for partners to have some years that are more productive than others, and it is never easy to ask a colleague to leave. Here are some areas to consider when deciding if it is time to take action.

Defining Performance

The definition of underperformance depends, in large part, on your firm’s written and unwritten expectations, its criteria for evaluating performance, and the terms of your partnership agreement. Increasingly, some older partners are being labeled as underperformers not because their contributions have changed, but because their firms and the legal marketplace have raised their standards.

Most underperformers show signs of burnout, exhaustion, anxiety or boredom. However, to prove underperformance, your firm first needs to define it. In general, underperforming partners regularly bill fewer hours than their peers and they fail to develop a self-sustaining practice, which includes introducing new clients and engagements to the firm. They may be unable to manage projects profitably or to clients’ satisfaction. Underperforming partners may feel as if the firm is not invested in them and therefore their productivity declines. Finally, underperforming partners cannot (or will not) adapt to a more competitive and demanding legal marketplace, to your firm’s changing values and objectives, or even to new technologies.  It is important is to understand why a partner starts to underperform. Everyone is different and each attorney is likely to have a unique backstory and reason for their issues.

Adding up costs

It is common for firms to ignore struggling partners, hoping they will find their own way back to productivity — or leave the firm. Neither scenario is likely. Most underperformers know they have a problem but do not know how to fix it, and few people willingly leave a secure job, even one that offers increasingly diminished returns.

In the meantime, underperformers cost your firm in the form of lost work, weakened client confidence and lower staff morale. The partner may even stand in the way of a deserving associate’s promotion, recruitment opportunities or a successful merger with another firm.

Try to quantify these costs and present them, as well as other “objective” evidence such as average profit per partner, to the underperforming attorney during his or her compensation review or in a more casual one-on-one meeting. Do not blame or accuse the partner, but instead express concern and ask how you and other partners can help get them back on track.

Working with the partner

If you believe rehabilitation is possible and the underperforming partner is willing to accept help, develop a performance management plan. Start by setting specific and measurable objectives, such as increasing billable hours by a set percentage or engaging a specific number of new clients in the next year. Then provide the partner with the support they need to achieve them.

Support can include mentoring by your firm’s top rainmaker, continuing legal education, or networking, financial management or computer courses. Consider a personal organization or career coach, or if the primary issue is burnout, a vacation or short sabbatical. Meet regularly with the partner to assess progress and discuss possible obstacles. It is important to note that there is no one-size-fits-all approach to dealing with underperforming partner. Try to be flexible and patient as you work with these partners.

Cutting losses

It is important to know when to cut your losses. Not every underperforming partner is capable of — or interested in — making needed changes. If the partner exhibits little progress or commitment to change after a predetermined period (typically one year), it is probably time to ask that person to leave. In such situations, make sure the partner’s exit is handled sensitively.

Passive techniques, such as reducing partners’ shares until they re forced to quit, can be as detrimental as aggressive ones, such as giving partners the boot on short notice. Both can damage firm morale and your reputation with clients and prospective hires. Also, unless partners are guilty of misconduct, you owe formerly trusted colleagues courtesy and respect.

Tackling the issue

It is hard to have partners who cannot seem to get out of a rut — or even worse, do not seem to want to. While it is not the type of situation any managing partner wants to deal with, tackling the issue head on is the best course of action. The decision comes down to not just your firm’s bottom line, but also your firm’s relationship with clients and prospects.

For more information, contact Justin Sylvan at [email protected] or 312.670.7444. Visit ORBA.com to learn more about our Law Firm Group.