Law Practice Management Asked and Answered Blog

Category: – Lateral

Sep 09, 2014

Law Firm Staffing and Growth Models – Lateral Partners & Of Counsel

Two weeks ago I was asked by the managing partner of a 16 attorney insurance defense firm about staffing and growth models for an insurance defense firm and I listed the following models and discussed the first model – grow your own associate staffing.

Attorney staffing/growth models include:

  1. Grow Your Own Associate Staffing
  2. Lateral Associate Staffing
  3. Contract – Staff Associate Staffing
  4. Lateral Partners (Equity or Non-Equity)
  5. Of Counsel (Various Approaches and Purposes)
  6. Mergers (Or Small Firm Acquisitions)
  7. Branching

This week I will outline the pros and cons for number 4 and 5 – Lateral Partners (Equity or Non-Equity) and Of Counsel.

Lateral Partners (Equity or Non-Equity

PROS

  1. Maybe a quicker way to increase profitability and cash flow.
  2. Allows the firm to acquire talent that it may not have time to grow or develop.
  3. Allows the firm to expand into new areas if the candidate has said experience and brings a book of business with him or her.

CONS

  1. Desired compensation may not fit within the firm's existing compensation structure.
  2. Clients may not come or materialize.
  3. May be issues with cultural fit.
  4. Costs may not be justified.

Of Counsel – Various Approaches and Purposes

  1. Allows the firm to acquire partner level talent, business, etc. without offering partnership.
  2. Provides the firm with a way to acquire a practice of someone wanting to retire.
  3. Provides the firm with a way to pilot test new lateral partner candidates and evaluate in a first-phase approach.
  4. Provides the firm with a way to partner with other firms.
  5. Provides a way for the firm to enter more new market areas.

Other models to be discussed in upcoming posts.

Click here for our article on hiring associate attorneys

Click here for our law firm management articles

John W. Olmstead, MBA, Ph.D, CMC

 

    

Sep 02, 2014

Law Firm Staffing and Growth Models – Lateral Associate Staffing & Contract Associate Staffing

Last week I was asked by the managing partner of a 16 attorney insurance defense firm about staffing and growth models for an insurance defense firm and I listed the following models and discussed the first model – grow your own associate staffing.

Attorney staffing/growth models include:

  1. Grow Your Own Associate Staffing
  2. Lateral Associate Staffing
  3. Contract – Staff Associate Staffing
  4. Lateral Partners (Equity or Non-Equity)
  5. Of Counsel (Various Approaches and Purposes)
  6. Mergers (Or Small Firm Acquisitions)
  7. Branching

This week I will outline the pros and cons for number 2 and 3 – Lateral Associate Staffing and Contract – Staff Associate Staffing

Lateral Associate Staffing

PROS

  1. Less training and mentoring time
  2. Will become profitable more quickly – maybe a year sooner
  3. They will be more acceptable to clients than new untrained associates
  4. May be able to charge higher billing rates
  5. Tradeoff of higher salary vs. quicker profitability and cash flow – sooner profitability may pay for itself in the short term depending upon the salary differential.
  6. May generate new ideas and skill sets/approaches/insights that can benefit the firm.

CONS

  1. May have to de-train them. They may bring practices and approaches that are undesirable to the firm
  2. Higher salary initially and expectations for more
  3. Sooner expectations for non-equity and or equity partnership
  4. Clients may not allow you to charge any more for these associates than new young associates
  5. May not result in higher profitability and cash flow any sooner than new associates (probably will – but if not costs will be higher)

Contract – Staff Associate Staffing

PROS

  1.  Allows the firm to staff up when needed using a project/matter staffing approach
  2. Allows the firm to better manage fixed costs and manage contract staffing as a variable cost and match costs to staffing needs
  3. Allows the firm to evaluate candidates before committing to full-time positions
  4. Can be experienced and seasoned or not

CONS

  1. Cost per hour will probably be higher
  2. Turnover due to uncertainty as to their future

Other models to be discussed in upcoming posts.

Click here for our article on hiring associate attorneys

Click here for our law firm management articles

John W. Olmstead, MBA, Ph.D, CMC

 

    

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