Time for Law Partner Sabbaticals
posted by Lawrence Cunningham
Amid the deep recession, cyclical and secular trends point to sustained reduced demand for legal services. US law firms have responded by aggressively pruning the ranks of entering and young associates (as Michael Kang’s excellent co-op post today synthesizes).
They have given less attention to trimming at the partnership levels, due to greater difficulty renegotiating membership interests and draws. One way to enable trimming at the partner level without disrupting a firm is to reinvigorate the partner sabbatical.
Before the 1970s, this characteristic feature of academic life was a staple at law firms too. Since then, however, as the US practice of law changed from a professional calling to a business enterprise, the sabbatical faded. The dog eat dog world of contemporary law practice made such a policy unappealing at most firms. Partners worry they’ll lose their books of business and cede ground to their intensely competitive partners for leadership and remuneration within the firm. They are concerned that clients will drop them in favor of other partners or other firms.
Yet the law partner sabbatical has endured elsewhere, including in Canada and England, especially in City of London firms, and even among a handful of US law firms. The partner sabbatical also was periodically revived at some firms throughout recent decades, though usually amid economic booms. Firms dangled the sabbatical as a recruiting and retention device, absorbing the high costs of funding partner draws when partners were not billing fee revenue.
In the current and coming environment, those sabbaticals must be offered on less generous terms, with partners sacrificing draws in exchange for relief from the daily grind.
At present, firms are cutting costs by terminating summer programs, delaying hiring, or offering incoming and existing associates alike deferrals or, as Cadwalader reportedly did last month, sabbaticals. Firm efforts to revise their recruiting and retention programs face a delicate balance in maintaining their appeal as a place to work while assuring that revenues exceed costs.
Partner sabbaticals could be a more appealing way to strike that balance than the delicate dance of managing the size and cost of the newer professional rung. Instead of shrinking the firm by releasing partners or reducing the associate tier, firms would adopt a permanent policy of requiring existing partners to take reduced-pay sabbaticals at designated intervals.
Following the academic model, partners with the firm a minimum period, say ten years, would take a one-year sabbatical at half pay every seven years. During that time, they would render service to the legal profession. This could involve domestic pro bono work, leadership in important professional committees and trips and service to the needy in emerging or developing countries. Or it could involve the partner’s own professional development, as through pursuing graduate level course work in law or another field.
In periodic revivals of the sabbatical, numerous trade offs are reported and debated. These are documented and evaluated in various manuals offering guidance, including a leading reference the ABA publishes. It highlights challenges, including how to induce participation, manage costs, maintain client service, what lawyers do on sabbatical, getting other partners to cover and avoiding letting sabbaticals stigmatize a partner.
The current environment provides an auspicious time to adopt policies simultaneously addressing all these concerns. The policy should be mandatory, offer half pay or less, require designated classes of service activity, and have mandatory programs for partners to cover for those on sabbatical.
Firms adopting such policies would instantly win the affection of the many younger associates now concerned, by associate-targeted firm policies, about their own job prospects and security. It would also have the advantage of reinstalling some dimensions of the traditional professionalism that characterized law firm practice through the 1970s when law firms evolved into businesses instead.
The prevailing cyclical realities and secular trends are economically punishing and there is little reason to believe that a return to the status quo of the 1980s and 1990s is likely. That period may be revealed as a blip in the legal profession’s history.
Instead of running a firm like a business, riveted only on bottom line and promoting cut-throat cultures, the practice of law could return to its erstwhile professionalism, characterized by thoughtful advice to clients, service to the public weal, collegial support among firm members, and cultivation and training of the next generation’s legal professionals.
August 13, 2009 at 8:30 am
Posted in: Law Practice
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Responses (1)
Onlooker - August 14, 2009 at 8:00 am
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At most firms, the term “free agents” can be perfectly substituted for the word “partners” in quoted phrase. When that is done, the phrase becomes something like “…offering existing partners occasional sabbaticals at negotiated compensation which is situationally appropropriate”. Other than that, it’s a great idea.
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