Tackling Underperformance Part 2

Tackling Underperformance Part 2

This is the second part of  posting on the issue of partner underperformance and suggest a process and set of procedures to cope with partners who are failing to meet standards.

The performance procedure for underperformers

Whilst there should be no room for the consistent underperformer in any law firm which prides itself on its quality and standards, nevertheless, the underperformer should be given the opportunity to improve and develop, and should be offered every possible assistance in training, coaching and support.  Indeed, I have found that in most firms there is an extreme reluctance to vote for an expulsion (even in extreme cases), unless partners can be satisfied that every opportunity has been given for improvement to take place. What is vital is for a programme  and timetable to be agreed for and with the underperforming individual, both so that the underperformer can feel safe from attack for the period of the timetable, and so that he/she is fully aware of what needs to be done to improve. The key is for somebody to take personal responsibility for the performance of the underperformer – as has often been said, the best way of managing performance is on a one-to-one basis.

A sympathetic firm will also want to investigate the reasons for underperformance which might give rise to curative measures other than action plans to improve straightforward underperformance.  Some of these issues may need counselling or other help.  Such issues often include:

  • Trouble at home or other personal problems (divorce, alcoholism, depression, etc).
  • The individual is “burnt out” and no longer finds the work interesting or challenging.
  • The individual is, in fact, no longer competent.
  • Fear of failure in trying something new and reaching for career progress.
  • The individual is making a quality of life choice and does not wish to contribute any more energy or time to the business.
  • Externally driven reasons such as the loss of a recent client or downturn in their sector.
  • The individual has not kept up in his field and is less in demand.
  • The individual is struggling because of poor time management or other inefficiencies.
  • The individual does not know what he should be doing in order to succeed.
  • The individual is isolated from the flow of better work or is not receiving an appropriate share of work coming into the team.
  • The individual is poorly monitored/managed or has not been persuaded to agree to the “rules of the club”.
  • The individual is insecure due to issues like merger discussions or Partner Remuneration programs, and has withdrawn into his shell, pending resolution of such issues.

Assuming that areas for performance improvement are reasonably clear to the Managing Partner, it is suggested that the underperformance procedure should follow a number of Phases, which should all be clearly outlined in the Performance Management System so that all partners are fully aware of the process and methodology from the very beginning of their career as an Equity Partner.

Phase One –  Formal or Informal Identification of an area for improvement

The Managing Partner or Head of Practice Group should clearly be responsible for monitoring partner performance generally and should of his/her own initiative or at the request of the Management Committee or Board discuss with a partner specific areas of a partner’s performance that need to be clarified and possibly addressed.

In some instances the discussion may result in the Managing Partner and the partner agreeing that there is nothing further to be done and that having gained a better understanding of the partner’s position the Managing Partner is in a position to report back to the Board with a clear and detailed explanation of the actual position thereby addressing and satisfying the concerns that have been highlighted.

Where the identified concerns need some action, the Managing Partner should agree with the underperforming partner what specific action is needed to address the shortcomings.  The action points should focus on objectives that should be specific, measurable, achievable, and realistic and time bound.  The underperforming partner must be given ample access to support by way of training, coaching, counselling and consultation.

The partner will then usually be expected to progress the action points and to keep the Managing Partner appraised of progress towards achieving the objectives in accordance with the agreed timetable which should (unless agreed otherwise) be no longer than one year.  In the ordinary course of events the Managing Partner and the underperforming partner will meet once the action plan has run its course with a view to agreeing the outcome and in the majority of instances concluding the review process.

Phase Two – Intensive Care

The failure of informal attempts to improve performance should usually move the procedure onto the second phase of the scheme for a period of formal remedial action.   It is, of course, possible that the failure at Phase 1 may be as a consequence of wrongly focused SMARTE objectives. More seriously, problems could result from the underperforming partner’s unwillingness to support and undertake the agreed objectives.  Nevertheless, this failure should lead to a period of what might be called ‘intensive care’.  This period should start with the Managing Partner agreeing with the underperforming partner why the previous action points had not been achieved and should agree a more drastic and final action plan and review process.  It should be abundantly clear by now to the underperforming partner that he or she is ‘drinking in the last chance saloon’.


Specific should address both meaning and focus. An objective should be rooted in action not vague concept

Measurable should identify the metrics by which success will be evaluated

Agreed, Aspirational, Advantageous should create a clear line of sight between personal desires and commitment, and the objectives which the firm requires, expects and values

Realistic and Reasonable should focus on what can actually be achieved and whether or not the objectives will fundamentally fit in with both the firm’s explicit requirements and its ‘hidden rules’

Time scaled the plan should set deadlines and milestones

Evidence Based should detail the data and evidence which can prove success in achieving goals beyond mere assertion

Once the timetable contemplated by the second Action Plan has run its course (which again should be no more than one year) then there should be a review meeting and an agreement reached between the Managing Partner and the underperforming partner as to the outcome of the Phase Two Action Plan during the period of intensive care.  This will hopefully lead to agreement that the area of concern has now been addressed with the help of coaching, counselling and training.  Equally, it may be clear by now that there are aspects of the partner’s contribution or behaviour that are still not acceptable to the firm.

Phase Three – Redeployment or De-equitisation

In some cases it is clear that the underperformance is due to factors outside the partner’s concern.  The most common reason is where the area of law in which the partner has traditionally practiced is not sufficiently busy to keep him or her fully productive. In such cases, it may be possible to consider redeployment of the underperforming partner to another area of the firm.  Redeployment of a partner whose only problem is under productivity can be an attractive option for firms because it is both humane (in comparison to firing partners or demotion on the lockstep ladder) and in many cases has a good chance of success.  But it does need a partner who is willing to retrain and an area of practice where there is a sustained need.

De-equitisation or reduction in equity share has also proved to be a favoured route for firms where equity partners are underperforming.  It has to be recognised that most de-equitisations usually result in the partner ultimately leaving the firm.  It rarely seems to work as a permanent solution.

In the case of both redeployment and de-equitisation, one issue is the loss of credibility which the partner suffers in the firm.

Phase Four  – Expulsion

Once the first three phases have been concluded without significant success, it is probable that the underperforming partner is going to be asked to leave the partnership.  At this stage, the morale of other partners should be considered.  We were told recently about a partner expulsion in one firm where all partners accepted that the right decision had been made but felt that the way the expulsion was dealt with was savage and unsettling.

We believe that at the expulsion stage the firm should be prepared to be generous, as it is easy to destabilise the other partners if the leadership is seen as excessively ruthless. We have witnessed in many firms the demotivating effect that an ungenerous or badly handled expulsion has had on the remaining partners.  At the other extreme, firms which ignore or fail to grasp issues of underperformance in a timely and sensible manner, also run the risk of demotivating the partners who are performing well.