Partner performance management can make or break a firm. It is often a highly sensitive area and understandably one that firms may be reluctant to address. Nevertheless underperformance affects firms in many ways – loss of opportunity, partner defections to competitors, falling morale and, at the bottom line, diminished profitability.
Most firms have some form of performance management in place but the disparity between formal performance evaluation procedures in the corporate governance world and that 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, the performance of committees and the performance of individual partners.
In the context of partner performance management our team of specialist partnership lawyers regularly advises firms on a wide range of key issues including the following:
- the steps which firms may need to take to clarify exactly what they expect of the partners and members
- the reasons for underperformance, including internal office politics, stress, over-promotion and lack of clear succession planning
- creating a balanced performance management system and aligning partner performance with compensation
- encouraging underperforming partners to move on or assisting partners who have been identified as underperforming to improve with a view to avoiding de-equitisation or expulsion
Advising firms on partnership/membership voting rights and amendments to the partnership/ membership agreement is often closely linked to the wider issue of partner performance management.
Our recent experience includes advising a US law firm on how best to communicate with an underperforming partner whilst addressing client succession issues and developing an external communications strategy.
How Fox & Partners can help…
- we understand the sensitivities for firms 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