The same... but different
19 December 2005
17 October 2013
17 March 2014
10 February 2014
24 March 2014
23 October 2013
There are many partners, but as many differences in what the term means, says Adam Makepeace
In 1985, David Maister penned a tale of woe in The American Lawyer entitled ‘The Motivation Crisis’. He argued that the lure of partnership could no longer be relied upon to motivate junior professionals to perform to the highest level. Twenty years down the line, we have all heard this story and there is still no sign of a happy ending.
Industry commentators often perpetuate the problem. Some start from the premise that all lawyers want to become partners, but become disillusioned. Others start from the premise that not everyone starts out in law wanting to be a partner. They are probably both right, because neither seeks to explain what partnership actually means for different people. For example, reported profit per equity partner (PEP) at Slaughter and May in 2005 was more than £1m, according to The Lawyer UK 100. The most recent Law Society Business Survey shows that the median PEP for the lowest quartile of equity partners in two to five-partner firms is £26,000. However, all the individuals concerned are equally entitled to wear the badge of partnership.
The extraordinary exodus rates of assistants from City firms apparently reflects both those searching for partnership by jumping from one top 10 firm to another and those leaving the City for smaller firms. However, when these lawyers achieve their respective partnerships, their experiences are likely to be so different that it is difficult to conceive they were searching for the same thing at the outset. Some partnerships may be a kitemark of quality, as elevation to partnership in many firms reflects legal expertise. However, it can also be merely a reflection of ownership and as such only an indicator of the ability to get a bank loan.
Partnership does not describe accurately the extent to which a person may be involved in the management of a firm. The status of partnership often gives rise to the ludicrous situation whereby partners will carry out the most menial of administrative tasks because their right to do so was bestowed as a consequence of becoming an equity partner. It is therefore not only unhelpful as a descriptive term, but is also sometimes a counterproductive one from a business point of view.
For a profession that prides itself on using language with precision, the usage of the word ‘partner’ is gloriously ambiguous - a one-size-fits-all term for an increasingly diverse profession. To add to the mix, because the value of law firms increasingly resides in those aspects of the firm such as brand, knowledge and infrastructure, from an economic theory point of view the structure of a traditional partnership as the optimum economic model for professional services firms is declining.
Paul Jackson, chief executive of accountancy firm Vantis, recently spoke of the need to leave behind the trappings of partnership when the firm became a plc. But there is no need to float a firm to apply some of the lessons that can be learnt from the corporate world. Here, people are appointed to defined roles by reference to the skills and experience they have and are motivated by goals relevant to them and remuneration that reflects their value to the business. This may not sit well with the orthodoxy of simply squeezing the equity partnership to increase PEP to reflect success. On the other hand, it appears some firms are squeezing so hard that they are in danger of throttling their futures.
Maister is still right. It is not sufficient to seek to motivate assistants simply by reference to partnership, even assuming they know what it is you mean.
Adam Makepeace is practice manager at Central London firm Streathers