Partner performance management can make or break a firm. It is often a highly sensitive area and understandably one that individuals may be reluctant to address as no one likes to be the subject of criticism, especially at work. Nevertheless underperformance affects individuals in many ways – loss of opportunity, defection to a competitor, falling morale and even expulsion.
Most firms have some form of performance management in place but the disparity between formal performance evaluation procedures in the corporate governance world and those in traditional partnerships and limited liability partnerships (LLPs) is often stark.
Performance management is not simply a process of identifying idle partners and showing them the door. More recently some firms have restructured their partnerships and whittled down the number of equity partners whilst others have focused on rigorous annual evaluation of their own performance and the performance of individual partners.
In the context of partner performance management our team of specialist partnership lawyers regularly comments on and advises individual partners on a wide range of key issues including:
- the steps which firms may need to take to clarify exactly what they expect of underperforming partners and members
- the reasons for underperformance, including internal office politics, stress and lack of clear succession planning
- creating a balanced performance management system and aligning partner performance with compensation
- how to avoid being perceived as an underperforming partner and being required to move on
- assisting partners who have been labelled as underperforming to improve with a view to avoiding de-equitisation and/or expulsion
Advising individual partners and members on voting rights and the terms of the relevant partnership or membership agreement is often helpful if they find themselves labelled as underperforming.
Our recent experience includes providing legal and strategic advice to a senior partner of one of the big 4 accounting firms on his prospective de-equitisation following a performance review which focused upon profitability.
How Fox & Partners can help…
- we understand the sensitivities for individuals in addressing issues of underperformance and provide confidential bespoke advice to our clients
- we aim to align our advice to our clients’ objectives and look for practical solutions whenever possible.
Please call us on 020 7618 2400