From time to time I call managing partners that I know – some are clients, some are just acquaintances.  Typically I ask them how things are going.  Those who are most enthusiastically happy seems to have a common response: “We finally did something about our underproductive partners.”

Indeed, if there was a theme that characterized legal management in the past couple of years for many firms it was coming to grips with partners whose productivity was below standard.  Some firms accomplished this through slight of hand – taking all their problem partners and demoting them to non-equity (sometimes at the same compensation level).  This doesn’t put additional cash in any of the remaining equity partner’s pockets, but it can increase the profit per partner statistic.  For other firms, handling the problem meant firing people, and it was not uncommon for some firms to end a year with 20 percent fewer partners than they had at the beginning of the year.

As might be expected, the reaction of the remaining partners was mixed.  Some partners approved and wondered why it took management so long to act.  For others it was disheartening and represented a sea change in the culture of the firm.  With these partners it is not uncommon to hear terms like “bloodbath” and “black Friday.”

The operative word heard around the halls of these firms seems to be “finally.”  Many law firms seem to take a binge and purge approach to management.  They make marginal partners and hire high risk laterals with the expectation that the situation can easily be corrected if it doesn’t work out.  But in most firms the act of firing a partner is so onerous that it is avoided by all but the most insensitive management committees until the problem becomes so severe that action is an absolute necessity.  Then the firm purges itself of the problem partners in “tough and decisive actions.”  I’ve heard a number of firms look back at the past year and say, with a bit of pride, “We finally got ruthless.”

All of this brings me to two observations.  If you are involved in the management of a large law firm and feeling quite good about yourself because you have “finally” gotten past your underproductive partner problem, here’s some bad news.  The problem will be back again next year and the year after and the year after that.

In part, this is because law firms are grading their partners on the curve.  The act of removing significant numbers of “underproductive” partners from a law firm’s equity ranks has the effect of raising the average for the remaining partners.  Lawyers who used to be viewed as solid service partners find themselves slipping toward being considered underproductive.

Another reason for the continued appearance of underproductive partners is the natural decrease in partner performance with age.  Most firms anticipate and accept the fact that partners “slow down” as they get older and closer to retirement.  This has typically been viewed as a phenomenon that occurs after the age of 60, but there are always some partners for whom it occurs earlier – partners who retire without telling anyone.  Members of the baby boomer generation, who are the prime candidates for this early decrease in performance, make up at least one-third of most law firm partnerships.  Therefore, it is reasonable to expect that if the percentage of partners who slow down remains the same, the resultant number of underproductive partners will be larger.  Of course, the hard charging Type A’s who will always be hard charging Type A’s push the curve even higher.

My other observation has to do with the way firms address the issue of under productive partners.  In the book Good to Great by Jim Collins (which I understand is now the all-time best selling business book) one of the hallmarks of great leaders and, accordingly, great organizations is that they are rigorous, not ruthless.

It seems to me that rigor involves two things.  The first is establishing and communicating a strict and uncompromising standard.  Law firms are very good at sending vague compensation messages but have a tough time with absolute standards.  I can’t tell you how many Management Committee meetings I have attended where there were arguments about what the billable hour standard was for partners.  If the management is unclear on the standard, how can the partners be certain?  And that’s the objective standard – consider how much less rigor there is in setting expectations for business development, associate training, and all the other soft stuff.

The other aspect of rigor is consistent enforcement.  A firm can’t have rigorous standards that it occasionally enforces.  But enforcement need not involve draconian actions.  Rigor can be enforced by refusing to let substandard performance be ignored.  I live in a small town and friends from large cities who visit are always amazed at the fact that there is no litter on the ground.  Their conclusion is that people are neater in small towns than in cities.  In fact, I know that if I drop a piece of paper on the ground in my town, someone will say something about it to me.  My failure to follow the standards of our community will be noticed.  Rigorous leaders enforce standards not by firing people but through noticing, commenting, being concerned, and encouraging and helping people meet those standards (okay, the threat of termination is always present, but it is not the first tool out of the box).

The point is, when law firms are rigorous, the need to be ruthless goes away and positive comments about actions taken are not prefaced by the word “finally.”