Altman Weil has republished an article entitled “What Are the Obligations of Partners“. The author suggests that the longterm health of any firm requires that partners continue to demonstrate that they are “adding value” to the firm. He writes that in order to maintain one’s equity partner status, that each partner should make contributions in the following areas:
Does this partner consistently provide the requisite quality client service? Does this partner engage in practice development efforts for himself and others? Does this partner participate in management as needed? Does this partner do his/her duty regarding mentoring, training, etc.? Does this partner consistently act in a firm-minded manner?
He suggests that a partner who is billing 2300 hours and doing nothing but collecting on his time is not “adding value” to the firm.
But can’t each partner make different contributions to the firm? After all, not everyone has good management skills. Isn’t a partnership really just a way to bring together different strengths under one roof?
What if the partner who is billing 2300 hours is doing a great job of cementing the relationship with a number of key firm clients.
There has been a number of articles written as of late about deequitization of partners. Senior management of firms where this has happened would have you believe that this is necessary in order to maintain the financial health of a firm in the longterm. But maybe part of it is just pure greed. Whatever the case, it seems like a trend that is here to stay.