Firms often find themselves with too many non-equity partners whose performance could and should be better.  But because of a long string of promotion decisions and/or lax management, the non-equity partner pool is bigger than desired and its overall contribution to the firm is, in a word, disappointing.  Indeed, many equity partners see this middle tier as a case of unrealized potential.

The unfulfilled non-equity partner performance (as a group) can result from a number of things.  In the first instance, some of the underperformers probably should not have been promoted in the first place. In other cases, good promotion decisions are subsequently undermined by a culture of assumed annual raises, political infighting hurting accountability, “siloed” work assignments resulting in pockets of overcapacity, and a stifling of motivation because promotion seems unlikely. If this is the status quo, non-equity partner performance usually is misaligned with equity partner expectations.

Based on experience, there are four steps that law firms can use to better align non-equity partner performance with equity partner expectations.  These steps do not correct any imbalance overnight, but once employed the potential within each non-equity partner is more likely to be realized.

Perform an Objective Evaluation of Your Non-Equity Partners.  If a firm has too many underperforming non-equity partners, it likely has been lax in its evaluation of them in the past. Improving non-equity partner performance starts with a thorough assessment of the non-equity partner pool. Quantitative and non-quantitative data and information about each non-equity partner, covering at least the preceding three years, should be assembled and evaluated to rank each non-equity partner’s contribution to the firm.  Once the evaluation is completed, the firm has a baseline report that serves as the foundation for the next steps.

Create a Comprehensive Professional Development Program. A lack of accountability is the root cause for unrealized non-equity partner performance.  Unfortunately, once non-equity partner promotions are decided, many firms move on to other issues and inadequately manage their newly promoted partners.  This institutional indifference can be corrected with the imposition of a non-equity partner professional development program in which each partner is guided towards a higher performance suited to his or her abilities.  To do so, the firm should give each non-equity partner direction on how he or she can contribute in the future, provide training to make him or her a success, and provide support so the plan’s objectives can be achieved.  With frequent feedback, incremental improvements in performance are possible and a higher level of accountability will result.

Compensate for Professional Development Program Performance.  Adjusting the non-equity partner compensation system to comport with anticipated improvements from the professional development program is the next step.  Through compensation tied to improved performance, the firm can use compensation to encourage behaviors that align with equity partner expectations.  Compensation decisions also can discourage conduct that veers away the goals the owners desire.  As a reward mechanism, compensation furthers the professional development that improves the firm’s financial health.

Use Professional Development Program Performance in Promotion and Tenure Decisions.   As non-equity partner performance comes into line with the expectations of the firm’s owners, an opportunity exists to further drive desired performance.  This is possible by integrating promotion standards that conform to the accountability fostered by the professional development program and new non-equity partner compensation system.  As the non-equity partners are rewarded for their successes they can become more motivated if the likelihood of promotion to equity partner is enhanced.  While not all of them will be promoted, having a reasonable chance for promotion supplements the accountability and reward systems already in place.  Conversely, accountability and rewards may indicate that some non-equity partners have not thrived as well as some others.  The firm can work with these colleagues in finding opportunities designed to accentuate their strengths and achieve their career goals.

The lifeblood of any law firm is its talent.  Law firms with a group of non-equity partners can find themselves blessed with the kind of talent critical to achieving the goals and aspirations of its owners.  Although realizing on that talent is not a given, it can be achieved by following these four steps.  If not taking these four steps or other decisive action, is your law firm doing enough to align its talent with owner expectations?