6. Please don’t get us in the news, unless you are receiving some kind of an award!
As much as this list sounds fairly obvious, I can think of at least two or three times people have flouted those demands in the last five years.
It’s absolutely necessary, however, that you take action with people who behave badly. Your actions in such situations should be swift and decisive.
The Verdict
In order to deal with the firing of a partner, firms need to make three things clear with their partners from the beginning:
1. You are not a partner for life! There should be a clear understanding that being an owner is not a status that is guaranteed forever. It’s something that is earned every year, not just once. That statement should be made loud and clear for all the current and aspiring partners (and should be understood by the entire firm as well).
2. There is real accountability. In a well-functioning firm, there should be a clear and transparent process for setting goals and measuring results. It should come as no surprise to a partner that he or she has not met revenue expectations or business development goals in a long time. Accountability makes all the difference between what could be an arbitrary or unfair decision to let someone go and a decision that is difficult but well-understood and accepted.
Unfortunately, many firms don’t set goals for partners; they don’t have performance evaluations for partners and they don’t even communicate to those partners messages about their personal weaknesses. As a result, when the time comes for the firm to deal with an underperforming partner, everything seems personal and arbitrary.
3. There is a mechanism. There should be a well-thought-out mechanism in the partnership agreement for terminating partners. Your corporate attorney can guide you to the various options, and there should be a way for the owner group to let someone go. Time and again, however, I work with firms whose only mechanism for a partner to leave is either through voluntary “retirement” or termination for cause. This can be badly insufficient to deal with someone who is underperforming but doesn’t want to leave.
Frequently, I also see agreements where a unanimous decision of all the partners is required to “fire” one of them. In some cases that means a partner would have to vote against him- or herself, which is absurd. It’s more sensible when other partners can overrule the one they are firing, though even then it may be difficult.