It’s early Tuesday morning at Typical Law Firm LLP and the American Lawyer report on Profits per Equity Partner (PPP) is making the rounds across mobile devices and laptops. The report makes for scary reading across many law firm conference rooms and Typical Law is no different. There’s a growing sense in the Typical Law conference room that bragging rights will be put on hold in some corners of the office this year. The fact is that Typical Law is still defending its “bragging rights” against two influential “prosecutors” — one, clients demanding lower costs (How dare they?!); and two, industry competitors profit-chasing and talent-poaching (How double dare they?!)
As the PPP report makes the rounds, water cooler conversations start to pick up outside the Typical Law conference room about another equally frightening article in the Wall Street Journal. This one is on how law firms are going about demoting (and even firing) equity partners. The article cites a survey of law firm leaders from 2015-2016 where 56% of these leaders said they planned to take away equity from partners in 2017-2018 and 67% said they planned to ask partners to leave outright.
It is in this context that Joe and Shondra, both equity partners at Typical Law LLP, get approached privately by their law firm leadership about a “new” metric that the firm would like to start tracking: Speaking Engagements per Partner. The leadership team has been doing some analysis on performance numbers from last year as part of its PPP review and found that partners with the most billed hours correlated with partners with the most speaking engagements. Suffice it to say, Joe and Shondra were not invited to that correlation party. So leadership presents Joe and Shondra with a “choice”: come up with a plan by the end of the day or prepare to schedule your exit interview. Why? Well, leadership believes that it is increasingly difficult to see how Joe and Shondra’s practice areas fit into their overall vision for the firm. In other words, Joe and Shondra need to show leadership the money by making it rain on ‘em.