Page 23 - Strategic Planning for Law Firms

Strategic Planning for Law Firms
Partnership Agreement
When a firm starts the strategic planning process, it must review its key documents, because they affect how the firm operates. The first document to review, typically, is the firm’s partnership agreement. How it sets out partnership in the firm, and what that entails, will affect how the
firm proceeds with strategic planning. Sometimes the partnership agreement is the largest hindrance for the firm to grow and thrive. Sometimes, its terms facilitate thoughtful, effective strategic planning. Who holds the firm’s power, who receives the firm’s compensation, who decides what and how, all affect strategic planning. Part of the strategic plan may be to revise the partnership agreement to better serve the firm and its attorneys. That’s why you generally look at the partnership agreement first.
Firm Compensation System
A close second to the partnership agreement is the firm’s compensation system. How attorneys are compensated affects how the firm is run, operates and whether it grows or contracts (there is no stasis). Different firms compensate origination, case responsibility, billable hours and collections differently. The behavior a firm compensates (good or bad) is the behavior it
will promote and generate. To the extent compensation doesn’t promote behavior favorable to the overall health and longevity of the firm, and favors a handful over the majority, it should be addressed.
Other Written Agreements
In addition to the partnership agreement and compensation system, the firm may have other written agreements that affect its operations – of counsel arrangements, agreements with institutional clients, long term building and equipment leases, etc. If there are agreements that affect how the firm is run, how attorneys are compensated and the firm’s future, those should be reviewed and studied.
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SECTION 03 BARRIERS TO STRATEGIC PLANNING