Confronting the Pain of Perpetual Underperformers

By Sue Manch –

This is that all important time of year when it is finally possible to analyze 2014 financial performance in its entirety. Too many firms will find that their productivity numbers are trending downward based on the lack of productivity of a group of lawyers. Every firm has a list – hopefully not too long – of lawyers whose productivity falls far below the actual or desired average for the firm or their practice. This group consists of people who find themselves at the low end of the hours scale for a number of different reasons. Some experienced the inevitable short-term market swing in demand for their area of expertise and are infrequent visitors to this list. These lawyers are experiencing normal slow periods that are the norm in any market. A few are new associates or laterally hired lawyers who are still finding their place in the firm and should not be a concern unless they appear on the list again next year. The third group is made up of lawyers who appear on the “low hours” list month after month, year after year, regardless of demand cycles. This last group represents what I would call the “perpetual underperformers.”

There is a tendency to look at lawyers experience short-term and long-term unproductivity the same way – and that can be a fatal error.

Strategic practice leaders expect and can plan for the lawyers who will experience market-driven ups and downs in productivity. They can deploy their senior lawyers on business development and profile raising missions and focus on building knowledge and skill in the developing lawyers with time on their hands. Likewise in the case of new lawyers and lateral hires, practice leaders can use the slow period that often follows firm entry to make introductions, build awareness for the new lawyer’s skills/expertise, and solidify business objectives. In both cases, thought practice leaders can help lawyers use their time well to position themselves to be ready when business picks up.

The Point of Pain

Perpetual underperformers present a significant challenge for most practice leaders because dealing with them demands tough conversations and in some cases, even tougher actions. Many practice group leaders tell me that even contemplating having conversations with colleagues about long-term underperformance gives them indigestion. Yet leaders tell me they almost always know why someone isn’t getting work. Generally, if they are chronically underperforming there is something essential missing in their skills, knowledge, or approach to work but whatever it is that is missing has not quite risen to the firm’s definition of incompetence. But true incompetence may be too high a bar to set for making strategic decisions about when someone should be disciplined or transitioned out of the practice. Firms must consider the full costs of inaction.

Underperformance – particularly long-term underperformance – carries significant costs to the firm and its culture, but also to the lawyer in question. Obviously it’s expensive, since underperformers have the same loaded costs as top performers, but it also has a negative impact on colleagues who are overwhelmed with work. They see these lawyers arrive late and leave early while retaining similar roles. Because most underperformers are doing some work, they take hours from colleagues that could be used to further the skills and knowledge of those with greater potential. Underperformers in the senior ranks can make up and coming lawyers believe there is no promotion potential and send them running for rival firms. Finally, there is a cost to the underperforming lawyer in terms of deteriorating skills/knowledge, confidence, and collegial relations within the firm.

Making the Firm Response Defined and Transparent

Policy is your friend in dealing with the really tough issues. Because this is a situation that involves someone’s livelihood as well as the firm finances, firms can better guarantee action by practice leaders on underperformance if transparent policies are in place. These policies should apply to all lawyers and be enforced consistently by the firm governing body.

Some examples of effective policy statements could look like these (with thresholds tailored to your firm’s billable targets and pro bono policies):

• Lawyers who log fewer than 100 client billable hours for six consecutive months must meet with their practice leader to discuss the problems affecting his/her workflow and follow up with a formal plan and timeline for returning to full productivity.
• Lawyers with fewer than 1300 annual client billable and pro bono hours will be placed on a probationary status and will not be eligible for promotion or compensation increases. He/she may be placed in an outplacement program depending on practice leader recommendation.
• Any lawyer with fewer than 1300 annual client billable and pro bono hours for two years will be placed in an outplacement program.

Support for practice leaders is also critical to the success of this process. Practice leaders need training and sometimes one-on-one coaching to help them gain confidence in preparing for and navigating these difficult conversations. They also need help understanding the impact of underperformance on their practice group on a regular basis. Easy to read and interpret economic reports designed to catch these early are invaluable and support early and regular action.

Discipline and Strategic Management Protect the Firm

Underperformance ignored has the potential to derail firm profitability, cost the firm high potentials, and tamp down firm-wide work ethic. There is also a risk management issue that must be considered. As most underperformers lack work for a reason, there is always the potential that they will run afoul of critical deadlines, client interests, or the rules of professionalism. Taking action when underperformance is long-term is in the best interests of the firm’s partnership as a whole, its clients, and the many families who depend on the firm’s health and success.

Blog Author

Sue Manch collaborates with firm leaders to devise strategies to align business strategy with talent strategy. Her goal is to assist firms in preparing their lawyers to provide the highest quality service to clients and build successful and satisfying careers. With 30 years of experience consulting and coaching, Sue is an established thought leader in legal talent strategy and lawyer development. She has a particular expertise in leadership development and has designed innovative succession strategies for law firms. Sue has deep experience in the design and implementation of leading-edge programs such as emerging leader development, alternative career track models and workforce planning, competency-based performance management models, and diversity initiatives.

Sue was a founding Principal of Shannon & Manch, LLP – now SJL Shannon. She has been an advisor to the majority of the Am Law 100 and Global 100 law firms, as well as top law schools and in-house legal departments. She is the author of four books, including the ABA publication “Learning from Law Firm Leaders” and countless articles and held positions at Bingham McCutchen, Georgetown University, The Catholic University of America Columbus School of Law, and Trinity College, among others. She has a MEd in Clinical Counseling from the University of Virginia and a BA in Psychology from Ohio University. Sue is also a Master Coach, certified by the Behavioral Coaching Institute and experienced in leadership, business development and team management coaching for lawyers.

Susan.manch@sjlshannon.com