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Law Firm Management

Three Tips for a New Level of Success in a Family-Owned Law Practice

By Theda C. Snyder

Whether it’s parents and children, siblings or spouses, unique management issues arise when family members work together in a law practice.

Pros and Cons of Working With Family

The “pro” of working with family members is that everyone is heavily invested in seeing the firm succeed.

The “con” is that family and business conflicts easily overlap. Home arguments increase work tension. If there are problems in the business, family members may be asked to take on burdens, including financial sacrifice, that would never be asked of other employees.

Successful Family-Owned Law Practices Do These Three Things

These three issues are important to every firm, but they take on a new dynamic in a family-run practice.

1. Define Who’s in Charge

The person in charge at home may not be the best person to manage the law firm. Well-organized firms have a governance document. Especially if your firm had a hardscrabble beginning, the lawyers may have never paid attention to this basic management tool.

Assign someone to come up with a draft document.

You can research “law firm governance document” to get a head start. Templates may be available from your bar association’s law practice management section. One of the first things your group should agree on is a dispute resolution mechanism; you might need it to resolve disputes about the rest of the document.

Define management roles.

You don’t have to name who will be the ultimate decision-maker on issues of, for example, finance, marketing, office operations and HR at this point. You do need to describe what each of those jobs entails. Your document should also provide a code of conduct applicable to everyone at the firm for dealing with firm personnel, clients and other professionals.

Lawyers are good at thinking of “what if’s.” Include a succession plan in your governance document. This would address not only the departure of the founder(s) but also how the firm will manage mergers, acquisitions and buyouts. For family-owned law practices, succession planning is especially important to address early on.

Circulate the draft. There are probably more issues than the original author imagined. Treat the governance plan as you would any bet-the-company document for which the firm is responsible.

Have a meeting — or maybe a retreat.

If the task keeps getting back-burnered, it may be wise to bring in a consultant who can lead your group.

2. Foster Talent Acquisition and Retention With Equitable Policies

To grow, your firm needs to bring in non-family members. But you will not be able to retain those new hires if they do not see an upward mobility path. Be transparent about how compensation and perks are determined and what it takes to earn a share of the business.

The natural tendency may be to compensate family members based on factors like affection or perceived need rather than production. This is a mistake. If family members need financial help, provide it outside the structure of the firm. This isn’t the kind of thing you can keep secret, and inequitable compensation is a sure way to lose your best performers and the clients who will leave with them.

3. Keep Family and Work Issues Separate

Pretty much every family business guru counsels that work issues should be left at work and family dynamics should not get in the way of running your business. Easier said than done!

You hear a lot these days about the importance of work-life balance. That’s even harder to maintain when work issues pervade the home environment. It’s natural to want to discuss your work at the dinner table, particularly if you were unable to connect during the business day.

When work issues dominate in your home, family members who are not in the firm may feel neglected. The other side of the coin is that you may be sending a message through your actions that outside family members are active decision-makers. “Pillow talk” and “parental advice” from those outside the firm can produce more conflict at work.

Schedule a specific family time when work issues are off-limits. That might be a date night or Sunday dinner. Explicitly communicate your love and appreciation.

All family members argue about things large and small and a family-owned law practice is no exception. Agree to leave those disagreements at home. The practice of law is tense enough without additional distraction. Make time for feuding family members to get together to work out their differences. Meeting in a restaurant can discourage yelling or histrionics.

It’s Your Family, Remember?

This was your child, your parent, your sibling and maybe your spouse before you practiced law together. Presumably, you share values. Your shared vision and affection prompted you to go into business with each other. That is the foundation that will let you work out differences and reach a new level of success.

Are you running a family-owned law practice?

Send a note to the editor and let us know how you keep the firm running smoothly.

Image © iStockPhoto.com.

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Teddy Snyder Theda C. Snyder

Theda “Teddy” Snyder mediates civil disputes, workers’ compensation and insurance coverage cases, including COVID-19 related coverage disputes, in person or by video. Teddy has practiced in a variety of settings and frequently speaks and writes about settlements and the business of law. She was a Fellow of the College of Law Practice Management and is the author of four ABA books, including “Women Rainmakers’ Best Marketing Tips, 4th Edition” as well as “Personal Injury Case Evaluation” available on Amazon.com. Based in Los Angeles, Teddy can be found at SnyderMediations.com and on Twitter @SnyderMediation.

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