The Law Firm Services Group of Naden/Lean is formal consolidation of our expertise in serving the legal profession. Our Law Firm Services Group specializes in the “business of law” and is divided into two specific areas: Law Firm Management and Litigation and Business Valuation Services.

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13 Lucky Tips for the Young Associate: Staples for Survival and Success

Congratulations! You’ve passed the bar exam and now it’s time to begin your career as an attorney. You’ll be starting in the same manner as many respected attorneys have, with the innocuous title of “first year” associate and perhaps with the goal of one day becoming a great attorney yourself. How does one make that transition from “first year” associate to renowned attorney? It doesn’t happen automatically and before one becomes a great attorney one needs to become a great associate.

Having been a part of a professional services firm for over 30 years and having consulted with many other professional firms over that time, I have studied what separates those young professionals who thrive and reach their goals from those who don’t. What follows is a compilation of tips to young associates, none of which are purely original, but all of which still have great value when applied.

1. Make Yourself Valuable – develop a specialized expertise currently needed in the firm; continue to hone those skills with the goal of being on the “short list” of those with your particular expertise both internally to the firm and externally to outside referral sources. Become “notorious” within the legal and social community for your specialized expertise.

2. Manage Your Time and Resources – don’t “recreate the wheel”. As a young attorney, you will be asked to do what probably has been done before. Seek those people out who know the process. Use forms, briefs, etc. already in existence as applicable and “tailor” them to your particular task. Utilize the experience of all members of the firm, including the support and clerical staff. They will appreciate you more when you take the time to ask for their help.

3. Display a “Sense of Urgency” and “Sweat the Details” – this suggests to the partners and other senior attorneys that your involvement provides a certain comfort level and that any matter that you are involved in will be handled in a “buttoned up” manner.

4. Know the “Rules” for Appropriate Demeanor and Professionalism – both in the courtroom and in the firm conference room. Everyone you come in contact with deserves some level of respect.

5. Recognize and Act on Opportunities – display your initiative and your potential to contribute to the firm both internally and externally.

The 8 Simple Truths about Law Firm Compensation Systems

The process of developing a compensation system is loaded with important and difficult decisions on a multitude of issues:

• What are the compensation criteria?
• How are the different criteria weighted?
• Is the criteria quantifiable?
• Are there systems in place to measure all the quantifiable criteria?
• Are there unquantifiable criteria?
• How much weight do we assign to that which isn’t quantifiable?
  
• How do we achieve stability within the compensation system, still reward outstanding effort, yet foster a "team" approach?

Do you have a headache yet? You should - These questions are but a few that will be discussed, debated and re-discussed until a system is finally agreed upon, probably leaving everyone in a state of fatigue. However, there is work to do even before tackling the issues mentioned above, and before we spend the time hashing and re-hashing what is fair and what isn’t. We must accept certain "simple truths" that are inherent in any firm, and others that will exist in any compensation system.

Simple Truth #1 – There is no perfect system for allocating income

How could any system be perfect that controls " who gets what "decided upon by "who gets what"? Perfect is a perception that must be shared by all or it will never be "perfect." Further, even if perceived as fair by all, the system will not be perceived as perfect by all. While the system may seem to function "perfectly" one year, it won’t function perfectly year after year. There will be changes and differences - and changes in the differences - from year to year, as you will see as you encounter the remaining Simple Truths.

Simple Truth #2 – Each partner’s contribution to the firm will differ

Like players on a good baseball team, everyone will play a somewhat different position in the firm. Some will get the work, others may do the work, some will work in the business, and some will work on the business. The objective of the process is to come up with a system that fairly determines the value of each individual’s contribution relative to the firm’s overall success. This is not an objective easily reached, given that it is hotly debatable what is of greater value - the ability to attract business or the ability to service and retain it.

Simple Truth #3 – Contributions by each partner will usually change over time

In most, if not all, firms where success endures over time there will be evolution on the part of each partner. Those who did the work will begin to get the work, those who got the work will start administering the business of the firm, and so on. The process of selecting a compensation system must acknowledge this. The system must also be built to accommodate this factor over time to avoid continually re-tooling the system.

Simple Truth #4 – Some contributions will be easier to quantify than others

Certain contributions are easy to measure, such as billable hours, fees billed, and fees collected. Relative to the value of these types of quantifiable contributions, how do we measure the value of participation in firm management, community involvement and other such non-quantifiable contributions?

Stop the Bleeding: Taking Care of the Firm’s Heart

They hadn't spoken to each other in months. Sure - they'd given each other the perfunctory nods of acknowledgment, even grunted hello at each other on an occasional morning, but they hadn't really communicated in months. They were avoiding having anything to do with each other if at all possible. She felt undervalued and discounted in the overall scheme of things. He couldn't understand her attitude. He was adamant that her perception of the value of her contributions to the relationship were totally disproportionate to reality and he was not about to "knuckle under” to her "whining" about it.

This sounds familiar today doesn't it? A husband and wife, both working, struggling for recognition of one by the other of their value to the relationship. Both perhaps on the brink of abandoning the relationship due to feeling undervalued. Only these two aren't husband and wife. They are partners in a law firm and they are involved, along with the other partners, in a business that is "bleeding." In this case the "bleeding" is the result of the conflict created by the dissatisfaction of a few related to the perception of each person's contribution to the firm and how it should be valued in the compensation system.

Other issues with the potential to cause conflict and dissatisfaction existed in this firm as well. They were of a more subtle nature and not necessarily related directly to compensation. However upon reflection they are also related to the issue of one's feeling valued and had existed for quite some time.

One "non-equity" partner felt that when he spoke at partner meetings what he had to say was discounted and sometimes even rudely ignored by the senior partners.

The Illness

Dissatisfaction among firm members and internal conflict exists to some degree on some level in every law firm and the costs for not identifying the issues and resolving them can be staggering. However most firms have a tendency to discount the severe impact this issue can have on the firm and therefore tend to "bury their heads in the sand". Development Dimensions International, a recruitment and development firm recently listed these among the myths that keep firm management in the dark regarding personnel defections: 1) Employees have stopped caring about firm trust and organization; 2) It's all about the money; and 3) It doesn't cost much to hire a replacement. In addition most believe that conflict means confrontation. After all, who wants to confront his or her partner or partners about such sensitive issues such as firm direction, inadequate leadership or an unfair compensations system. Who would want to deal with a promising associate who is upset about a lack of training or being "thrown to the wolves" after only a week of firm indoctrination, or perhaps a senior associate who has concerns about being considered a " production machine" without feeling vested in the long range plans of the firm. Many of the issues are of a "prickly" nature and are often awkward to deal with. However, left unattended they often cause valuable people to seek other options in the marketplace.

Most firms don't recognize the significant negative financial consequence of either not being aware of, discounting or even ignoring these types of issues. A number of studies have concluded that the cost of replacing a productive member of a law firm is approximately the equivalent of three times the departing member's compensation. Also, there are other hidden losses and costs suffered by the firm due to the manner in which dissatisfaction and conflict manifests itself. Unhappiness and conflict generate a negative attitude that can easily invade other firm members negatively affecting their productivity as a result. A reluctance to collaborate professionally with firm members on the other side of an internal conflict can lead to inefficiencies in service and ultimately even the best result for the firm's client and the firm.

The impact of these is sometimes subtle and sometimes not, but in every case it is negative. Am I making this out to be a more significant issue than it is - I don't think so!

Consider the following - according to a survey of over 250 legal administrators one of the top three requested subjects for continuing education is "Conflict management". According to a another survey conducted by the ABA Young Lawyers Division in 1995 almost 33% of the respondents to the survey said that were strongly considering leaving their current firm at some point within the next two years due to dissatisfaction on some level, another 31% responded that they might also consider doing so. In an article in New York Magazine, June 1999 it was noted that big firm lawyers are less satisfied with their jobs than ever despite the explosion in salaries and profits. This was confirmed during an interview I conducted with a young attorney who had recently left a large local law firm .He told me that during the six years he had been with this firm over 130 attorneys had left the firm for various reasons, many of which were related to the issue of feeling undervalued or feeling "stranded" within the firm. This constituted a turnover of over 100%. It was his observation that the firm either chose to ignore or discounted these problems and, as a result, the firm is now a fraction of the size it used to be and a fraction as profitable as well. Additionally, there are web sites on the Internet today that provide "bulletin boards " for interaction and communication for those attorneys who are dissatisfied as well as information and council regarding opportunities and options in the legal profession for those considering or wanting to make a change. These same web sites sometimes also offer articles of advice and explanation regarding attorney retention such as The New Associates: A Letter to Puzzled Partners by Mark L. Byers, Ph.D. that touches on factors that might cause young attorneys to become disillusioned and dissatisfied. As you can see the subject of dissatisfaction and conflict is a prevalent issue today in the legal profession. We know that employment alternatives have never been as numerous for an attorney contemplating a change in employment and it is truly a "seller's market" today. Keeping all of this in mind, internal conflict and dissatisfaction has become is a significant issue in the legal profession and is so pervasive today that law firms of every size must address it or be prepared to ultimately pay the very expensive price for ignoring it.

In order to get a complete picture of the problem of what causes an attorney to leave one situation for another and how it could possibly be prevented I attempted to get as broad a spectrum of input as possible. I interviewed a cross section of attorneys, all of whom had been in either employment or ownership positions in firms and had chosen to leave for another opportunity. Included in the interviews were partners who had withdrawn from both large and small firms to go to other situations, equity and "non equity" partners, associates who had resigned from one firm to become associates in another firm, male attorneys, female attorneys, attorneys in their 30's, 40's, and 50's.

The Causes

In discussing the most common reasons behind conflict or dissatisfaction a common theme emerged -one's value and compensation as a measure of it, either within the firm or within the marketplace. Clearly if one doesn't feel properly valued where he or she is they are likely to seek a situation in which they will feel valued.

Simple Truths About Developing and Retaining Today’s Young Associates

You don't have to be told that this generation of associates is different. Their priorities and perspectives are different. They are motivated differently. Money is important but life style issues are more critical to them. They have more choices than the generations before them and therefore more leverage. If their work culture and circumstance proves less than ideal or different than originally promised, they will move to another place where they feel its just right. They are not afraid to move from circumstance to circumstance, either as a means of achieving professional advancement or that "perfect" work culture.

At the same time, don't be fooled into thinking that they are a generation of "slackers." They welcome challenge and responsibility. They want to know where the firm is going, how its going to get there, and what role they will play. They want a clear explanation of firm expectations and what it takes to move to the next "rung." They don't like criticism, but welcome constructive critique. They are technologically savvy and not easily intimidated.

The high cost of associate turnover to a firm has been well documented. It has been estimated to be as much as three times the salary of the departing associate before a replacement associate can ramp up to maximum productivity. It becomes important to review and implement certain "simple truths" about developing and retaining this new generation of attorneys in order to minimize these types of additional costs, and to perpetuate the firm as a viable business.

Below is a list of some of these "simple truths."

1. Make sure salaries and benefits are, at the very least, market competitive – if not, they will either know or find out shortly. While life style is a priority, money is still important and is seen as a measure of value. If paid less than market they will feel undervalued and eventually they will leave for a place where they do feel properly valued.

2. Communicate the firm's mission, short and long term strategies and the part they will be playing in these plans – This gives the associate a secure feeling that the firm has vision, direction, leadership and a sense of where all the "moving parts" belong.

3. Provide a clear explanation of firm expectations relative to billable hours, fees originated (if applicable), involvement if firm activities, community and professional involvement, professional conduct, etc. Additionally, provide a concise explanation of how and how often associates are evaluated – This allows the associate a fair chance to measure the opportunity you are providing him/her. It also provides the firm with fair criteria and timetable for evaluation.

4. Tell the associate in a simple, clear, direct manner what would make them more valuable to the firm – This type of constructive information gives the associate of today the kind of direct input that they easily understand. It also provides to them a roadmap for becoming valuable in the overall strategy of the firm. This is the type of information which will help make the associate feel secure that they are seen as a long term "player" in the firm.

Litigation Support and Business Valuations

Our Litigation and Business Valuation team complements the work of the attorney. The financial and accounting issues in litigation have become increasingly complex. Proper advice and analysis will:

• Enhance the litigation strategy
• Enhance your negotiating position
• Enhance the likelihood of a satisfactory out of court settlement
• Enhance or minimize the settlement amount
• Enhance the probability of winning the case

Whether for financial, estate tax, investment, or legal purposes, there has been a significant increase in the need for business valuation expertise. As members of the National Association of Certified Valuation Analysts (NACVA), we have acquired the knowledge and ability to establish the worth of an enterprise.

Litigation support involves the quantification of economic damages pursuant to existing or pending litigation using accounting and auditing techniques. We have experienced competent staff who can compile information efficiently to assist in the calculation and documentation of any potential economic loss or damages.