ARE YOU DEVELOPING YOUR PARTNERS’ TALENT?

“You’ll say you’ve seen seven wonders and your bird is green, but you can’t see me, you can’t see me” AND YOUR BIRD CAN SING. THE BEATLES.

When partners in Latin America talk about talent development they normally refer to associates. Topics like career structure, training, compensation and incentives are within the main areas of interest. This is obviously a critical element of a firm’s success, although many firms don’t pay sufficient attention to it. But what’s surprising is that firms don’t normally take into account talent development as a key element in partners development, considering that partners are the main talent asset of the firm.
There is an implied notion that once a lawyer has reached the partner’s level it’s mostly about what he/she can produce for the firm (clients and revenues primarily). This wrongly assumes that partners already have and know what they need to perform and how to help the firm grow and succeed. From that point on, goals, incentives and motivation focus mostly on performance, but not on a continuing development of their talent as they grow in the partnership.

The above situation can be observed in typical partners’ evaluation and compensation systems. Many law firms in the region have decided during the last decade to evolve to compensation systems that can be named together under the title “modified locksteps” (although I prefer the name “performance lockstep”). Modified or Performance Locksteps have brought several advantages to law firm functioning: (1) a set of criteria (financial and non-financial) about what a partner is expected to do; (2) a process establishing how partners will be evaluated, providing more transparency; and (3) as a consequence, a more fair and equitable pie splitting among partners. Although the accomplishments of these systems are many times partial and partners complain about the time and effort it requires, in general terms they have improved the collective functioning of law firms and provided a more stable partnership environment. The trend seems to be that more extreme systems at each side of the spectrum (pure lockstep and eat-what-you-kill) are losing ground among the top-tier firms, for a variety of reasons which exceed this article.

All this progress, however, has still been unable to deal efficiently with partners’ talent development. Evaluation processes mostly take into account individual performance. Collective performance, either in a practice area level or firm level, is difficult to observe and analyze. Both from a financial or non-financial perspective, a group assessment entails the risk of hiding non-performing partners, and that could endanger what is normally considered the basic goal of this system: justice and fairness. It does not matter so much if the firm can achieve a better collective performance; the key is that it doesn’t fail at giving each partner what he or she deserves. That can only be achieved in individual evaluations. Naturally, partners are then concentrated more on their individual performance than in the practice area of the firm as a whole. Even if that means competing against each other.
Since the main goal of the evaluation is to achieve fairness among partners in terms of pie splitting and recognition, the system operates in a photographic and retrospective manner. We define a cutting date (normally the end of the year) and we analyze what each partner has done up to that date, take a picture and perform an evaluation that will result in a partner being promoted or not within the system. This is not incorrect but it is insufficient. Why?
Partners play roles within their teams and firms. These roles need to adjust and evolve depending on the needs of the firm and the partners themselves. In dynamic firms these roles evolve constantly because market and client needs change permanently depending on circumstances. Flexible and adaptable professionals are always (i) letting go of something they do to allow others to take that responsibility; and (ii) learn something new that would be helpful for the firm and the team. This constant adaptation requires a look that is both backwards and forward, experience and potential. It is not set at any specific time of the year since it happens all the time during the year.

When you evaluate performance just for recognition and fairness purposes you are leaving behind two critical aspects of managing a law firm and a group of professionals: (1) the strategic role that each partner has to take in the overall strategy of the firm, which includes both the past and the future; and (2) the talent development aspect of any evaluation. Partners are the main talent assets of the firm and evaluations should be one of the main tools to develop that talent.

Typical compensation systems should be improved to include:

1. A collective dimension of results and not just individual goals. This might be challenging but it’s worth the effort if we understand that the business of modern law firms is not a group of scattered and loosly-coupled individuals but actually a complex professional machine where individuals and groups need to interact in efficient and collaborative ways.
2. A role assessment of individuals and groups. Is each partner in the right place doing what she/he should do? It’s not just about performing on general financial and non-financial goals. It’s about being in the right place doing the right thing at that particular point of the partner’s career and firm’s strategic needs.
3. A talent development matrix that would provide real improvement of partners’ skills in the firm. This should combine in a deep and strategic manner the past experience of each partner with her/his potential and competencies in more demanding roles and responsibilities. A sophisticated analysis of strengths and weaknesses in a dynamic fashion will help to develop our partners potential and work on our firm’s future. Evaluations mostly based on merits and recognitions of the past will not provide the best talent development approach for the firm.

We might think that we have good performance evaluation systems, but partners many times feel confused and frustrated by the results of those processes. They don’t feel they are seen in the right way, and having a lot of information available is not a guarantee of success. Like in the Beatles’ song you might think you are seeing everything you need to know, but if you can’t see your partners from this broader perspective you will not become the firm you need to be.