Adding Lawyers and Taking on Partners
If your lawyers are struggling to keep up with all the work you’re bringing in, that’s a sign that your firm is thriving.
But it’s also a signal that you need to increase your legal staff. Overwork can lead to lawyer burnout. It can also cause delays, missed deadlines and unhappy clients.
There are several options for increasing the number of lawyers at your firm. If you think the bump in your workload may be short lived, a temporary contract attorney can be a good choice. If you need junior lawyers or a lawyer with specific expertise, you might consider hiring an associate or staff attorney. And if you want someone with experience and a book of business, you may be looking at taking on a new partner.
Independent Contractor Dos and Don’ts
An independent contractor is usually less expensive and less of a commitment than an employee. Independent contractors don’t receive law firm benefits like health insurance or a 401K. They don’t have income taxes withheld from their pay, and they are responsible for the full amount of their Social Security and Medicare taxes. And while you must pay your salaried employees even when work is slow, you can more easily decrease or eliminate an independent contractor’s hours during a downturn.
Contract lawyers can be invaluable when there’s a sudden temporary need for more staff. Examples include big document productions or a case that’s about to go to trial. Contract lawyers can also provide research assistance or specific expertise. A contract lawyer can be a good option if your caseload has grown, but you aren’t sure whether the increase is permanent.
When hiring contract lawyers, be aware of Internal Revenue Service Regulations that prevent people from being labeled contractors when they are really employees. In general, independent contractors have some autonomy. The more you control the way attorneys do their jobs, the more likely they should be classified as employees.
Hiring Associates and Staff Attorneys
When hiring lawyers, consider the level of experience you need. A lawyer with several years of experience can do more and will require less training and supervision than one who just passed the bar. However, the inexperienced lawyer may be less expensive and a better fit for entry level work like reviewing documents and making routine court appearances.
Also consider whether you want an associate who may put in long hours in hopes of achieving partnership, or a staff attorney who may work a more reduced schedule but who will not have an expectation of partnership.
Bringing in a New Partner
You should think carefully before adding an outside lawyer as a partner in your practice. A partner is a co-owner who will share in decision making as well as profits. In many cases, you may be better off hiring the lawyer as an associate or staff attorney rather than offering partnership right away.
A new partner should significantly benefit the firm. Ideally, a partner will bring skills or expertise you lack and will already have an established book of business. A partner should also have values and goals that are compatible with the rest of your partners and the firm as a whole. For example, your commitment to affordable legal representation may be incompatible with the new partner’s desire for a prestigious office and big corporate clients.
Your new partner should be someone who behaves like a grownup. That means being ethical and handling finances responsibly. It also means being able to get along with the office staff and being able to discuss and resolve law firm issues in a businesslike manner. A partner who is hotheaded, arrogant, irresponsible with money or generally hard to get along with can be a disaster. A partner who behaves unethically can get the whole firm in trouble.
Your law firm may already have an operating agreement and a clear division of responsibilities among the partners. Where will a new partner fit in? Have detailed discussions about partners’ respective responsibilities and how you will hold one another accountable. Decide how you will vote on firm business, divide firm profits, and handle partner departures. Then put everything into a written agreement to protect yourselves and minimize misunderstandings later.