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Preparation and Use of Personal Attorney Business Plans

By Joel A. Rose

Personal goal setting has become a popular and effective management tool that has been implemented by partners and associates in many of the more financially and professionally successful law firms.

Properly conceived and implemented, the personal goal setting process allows attorneys - individually and in concert - to tailor their personal and professional activities to enhance their performance and to progress the firm in the future. The planning process will foster communications between attorneys and lawyer management and create a sense of "ownership" and common direction. Further, properly implemented, the individual planning process will build "emotional and financial equity" between the attorneys and the firm, as opposed to only financial equity.

Although personal goal setting should by definition be individualized, it must of course align with the needs and culture of the organization. Every firm should therefore reflect on the qualities that its lawyers must embody to achieve success. These qualities will differ from firm to firm.

Preparation and Use of Personal Plans

Personal business plans can be introduced most easily and effectively in firms whose compensation systems have sufficient flexibility to recognize each individual's total contribution to the firm. By contrast, it is difficult to achieve maximum benefit from personal work plans in firms that have lockstep or other seniority-based compensation systems.

Procedurally, the first step in creating a personal business plan is performed by the partner, who completes a goal-setting form using approved guidelines (see below, Tips for Creating a Partner's Customized Model and Plan). This requires the partner to develop personal goals, and also promotes a sense of proprietorship. The completed form is sent to the managing partner or to the partner's practice group chair for review. The managing partner or the practice group chair meets with the partner to discuss the model, consider alternatives, and eventually approve the model.
The planning exercise itself requires partners to think about both their targeted individual production and the nonbillable activities they wish to pursue. In effect, the completed personal plan defines a partner's commitment to the firm for the coming year and establishes guidelines for accountability.

The plans for all attorneys in each practice group are reviewed and approved by the practice area chair, the department head (if applicable), and finally by the managing partner. Members of the firm's Management Committees are given copies of all models. Department heads have copies of all the models of partners in their respective departments. Practice group chairs have copies of all the models of partners in their respective practice groups.

When discussing plan-performance discrepancies with individual partners, managers should consider amending their plans as well as their behavior. Plan amendments should not be a common practice, but there may be situations where an adjustment is warranted; this helps eliminate surprises at year-end.

In addition to these quarterly reviews, firm managers should meet with each partner annually to discuss and approve the partner's performance model for the next year.

Use of Personal Plan in Compensation Decisions

There are two ways to utilize personal plans to assess performance in the compensation process. First, the performance of a partner for the current year compared to his/her performance model should be a factor in determining points or percentages. Many firms use a "3-year look-back" to review the partner's performance in an effort to reward positive trends and to prevent partners' compensation from taking unusual spikes upward or downward.

Second, if the firm has an extraordinary-performance bonus fund, use the expectations spelled out in the model as the baseline for identifying extraordinary performance.

Managing the Individual Planning Process

Simply setting goals is not enough. Individual performance is tracked to ensure that partners meet their goals. To do that, the practice area chair or the managing partner should conduct a quarterly analysis to spot problems before they get out of hand. These meetings should assess how well the partner is living up to the plan - analyzing accomplishments and disappointments, as viewed by the partner and possibly by other partners.

When discussing plan-performance discrepancies with individual partners, managers should consider amending their plans as well as their behavior. Plan amendments should not be a common practice, but there may be situations where an adjustment is warranted; this helps eliminate surprises at year-end.

In addition to these quarterly reviews, firm managers should meet with each partner annually to discuss and approve the partner's performance model for the next year.

Tips for Creating a Partner's Customized Model and Plan

For use in preparing partners' individual business models and plans, design a standard worksheet form. The goal of a standard worksheet is to promote uniformity in the process for creating personal plans, not to seek rigidly uniform results.

In each form section described below, request at least the information described in italics. Adjust the form as necessary if alternatives to hourly billing are used, if revenue is generated in non-dollar currencies, etc.

1. Personal Production
• Billed-and-Collected Hours. Estimate anticipated productivity, monthly (average) and annually, in terms of billed and collected hours of work.
Designate that the partner is expected to work at least a specified total number of billable hours. Billable hours should represent what you expect from an "average" partner. All exceptions, up or down, should be explained on the form or on an addendum. There should be exceptions for the managing partner and for partners with special arrangements.
Since you are looking for a standard to determine who is extraordinary, do not accept unreasonably high or low billable hours on the form.
• Nonbillable hours. Total monthly and annual hours designated for nonbillable projects.
Designate that the partner is expected to work a specified number of hours on nonbillable projects, not counting personal time.
Nonbillable hours should include the administrative and substantive firm-management time specified below in item #7. The firm should have a consistent policy on how time for routine administrative activities should be counted (vs. intensive administrative activity performed by partners who manage certain types of work). Exceptions may be granted for management, special projects, and special arrangements for certain partners.
• Revenue. Estimate planned contribution to firm revenue, monthly (average) and annually. Explain any unusually high anticipated billings.
Billable hours collected at client-imposed standard rates may require a higher number of hours for some partners. Also, partners should be looking for opportunities to price certain projects at other than rates times hours (eg, value billing).

2. Productivity improvement plans
• Detail proposals for improving personal productivity during the coming year, eg, working more hours (specify hours); working on higher paying files (list file types); improving efficiency (describe how); better use of paralegals and staff (specify which paralegals and staff); increasing gross billings; originating more business; etc.

3. Client Development
• Specify plans for targeting new clients. The partner should outline a strategy for each target, plus his/her plan for status reporting. Describe planned specific activities such as speaking or writing (list target forums for speeches, topics and target publications for articles, and specific plans for securing these exposures).
• Similarly, detail plans for using participation in community, professional, and civic groups for client development. Also describe any other marketing-related plans.

4. Participation in the Team Concept
• Describe planned methods for introducing specific clients to other specific lawyers in the firm, and for distributing specific types of work to other specific lawyers.
• Similarly, describe methods for turning over client management to others, specifying any particular clients to be transitioned to other lawyers.

5. Quality Control
• Describe any plans for developing practice quality control mechanisms or related systems. Detail the purpose and target date for completing development.
• Describe methods used for ensuring that work is done in a timely manner, including following up on work delegated to others.
Selected clients should be queried regularly to determine if the client is satisfied with the attorney's performance. Client satisfaction surveys may be performed by the attorney, by firm management, or by an outside consultant.

6. Professional Development
• Describe any specific professional goals such as bar association and related activities. Require progress reports.
• Describe specific CLE plans.
• Describe any specific goals to improve skills and ability to handle increasingly sophisticated matters.

7. Management
• List any plans for participation in administrative or substantive firm-management activities, and the estimated amount of time to be devoted to each.
Job descriptions and an evaluation process should be prepared for each management assignment such as Management Committee, Compensation Committee, Recruiting, etc.

8. Required Improvements
List any recognized weaknesses that must be improved/eliminated. Simply setting goals is not enough. Individual performance is tracked to ensure that partners meet their goals. To do that, the practice area chair or the managing partner should conduct a quarterly analysis to spot problems before they get out of hand. These meetings should assess how well the partner is living up to the plan - analyzing accomplishments and disappointments, as viewed by the partner and possibly by other partners.

When discussing plan-performance discrepancies with individual partners, managers should consider amending their plans as well as their behavior. Plan amendments should not be a common practice, but there may be situations where an adjustment is warranted; this helps eliminate surprises at year-end.

In addition to these quarterly reviews, firm managers should meet with each partner annually to discuss and approve the partner's performance model for the next year. Consider a requirement to improve or cure the deficiency before the partner is eligible for an extraordinary award.

Conclusion

The personal planning process, if conceived and implemented correctly, will create an environment that will enhance the synergism between individual lawyers and the firm.



Joel A. Rose is a certified management consultant and president of Joel A. Rose & Associates in Cherry Hill, NJ which consults to the legal profession. He may be contacted at (856) 427-0050 or jrose63827@aol.com.


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This page contains a single entry from the blog posted on January 12, 2012 3:12 PM.

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