The eight golden rules – how to be a successful equity partner
The first rule of being a successful equity partner is covering your costs and share of the overheads – this is the very minimum expected. Unlike senior associates, or even salaried partners, it is the equity partner's responsibility to make sure that their team's client work adds value to the firm through profit. If an equity partner acquires a reputation for continually failing to achieve their targets, this normally leads to them leaving the practice.
February 14, 2013 at 07:00 PM
5 minute read
Succeeding as an equity partner is where the true rewards of partnership lie. But many promising young partners fail to make the transition. Heather Townsend and Jo Larbie explain how to make this step
1. Hit financial targets
The first rule of being a successful equity partner is covering your costs and share of the overheads – this is the very minimum expected.
Unlike senior associates, or even salaried partners, it is the equity partner's responsibility to make sure that their team's client work adds value to the firm through profit.
If an equity partner acquires a reputation for continually failing to achieve their targets, this normally leads to them leaving the practice.
As an equity partner, all your excellent work won't count if you don't record, bill and collect the cash.
What's more, it will undermine your relationship with your partners, particularly if it affects their profits.
2. Grow your practice
A partner who does not grow their practice will not progress up the equity ladder, so marketing and business development should be a top priority.
As a senior associate, you may have already demonstrated your potential in this area. But as an equity partner, it is essential to frequently and consistently devote time to business development related activities.
A partner without a following (except a highly valuable technical expert) is regarded as a 'glorified senior associate' and vulnerable when times get tough.
An equity partner cannot solely rely on other partners to generate and bring in work.
With many firms routinely expecting their partners to build their own part of the practice, as well as sourcing referrals for other departments, an equity partner needs to make time to get to know the other partners, what they do and what they have to offer.
The rule here is 'Do as you would be done by' – you can't expect referrals from other partners if you're not prepared to do the same for them.
It is vital that partners share information on their capabilities with each other, either formally (at partnership meetings and via internal communications, such as newsletters, emails and blogs) or informally around the drinks machine.
A successful equity partner will find the right balance between nurturing and delivering their existing client portfolio, as well as finding new clients for themselves and the practice as a whole.
As most equity partners know, generating referrals and new instructions from existing clients is one of the easiest ways of winning work.
3. Develop your team and others
You can get to partner purely on your own merits. But to make it as a successful equity partner, you need to have a strong team behind you and time should be taken to develop their capabilities.
Passing on your knowledge and experience also ensures that you have a backing of capable people to whom you can confidently delegate work as your practice expands – if you're going to hit the profit targets you have committed to deliver, doing all the work yourself may not be an option.
Generally, in our experience, associates and fee earners are always keen to work for a partner who involves and develops them.
This helps when you are facing a tight deadline and competing with other partners for the services of the firm's brightest people.
4. Identify and develop your potential successors
It doesn't seem quite right in an article about becoming an equity partner to talk about finding and developing your successor. But a good equity partner will do just that.
If a practice is going to remain profitable and sustainable in the long term, there needs to be good talent in the pipeline at all levels, ready, able and willing to make the next step up.
As an equity partner, you should be thinking about these questions:
• When might I retire (or leave the partnership)?
• What skills, knowledge or mindsets will my successor need?
• At what stage in their career will my successor be needing to hone these skills?
• How can I, as well as the rest of the partnership, help them develop?
5. Be politically savvy, but not 'political'
Anyone who has spent time in a partnership will know that there are a complex system of egos, constituencies, issues and rivalries.
Even the best-managed firm suffers from internal politics spurred on by strong personalities, sensitivities, and empire protectors.
Politically savvy equity partners accept and deal with this environment by considering the impact of what they say and do on others.
(This should not be confused with being 'political', which is a polite term for not being trusted or lacking substance.)
Being politically savvy allows them to work with other partners and get things done without triggering unnecessary negative reactions.
6. Have a plan and
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