Partner compensation: Should management time count?
Question I am one of the founding partners in a 25 attorney law firm in the northeast. We have three equity partners, six non-equity partners and sixteen associates working in the firm. We focus totally on litigation. Each of us three equity partners have equal ownership percentages and since day one (20 years) have divided firm profits equally along those lines (1/3, 1/3, 1/3). We each put in the same amount of effort and work – but since I am managing partner – my fee collections are much lower than those of the other two equity partners and I am concerned that they may feel that I am not carrying my weight since my fee collections are lower. How should this be handled in our compensation system?
Answer. This is a common question that we hear often. It sounds like you are still allocating income in the same manner that you did when the firm first started.
Often when a firm grows the partner compensation system needs to be re-examined when and if partner roles or contributions change. As the firm has grown I suspect that your time spent on management activities has grown as well. I, as well as many other legal management consultants, believe that firm management (running the business) is as important as generating client fees and should be so considered in partner compensation systems.
We have numerous law firm clients where at least one or more of the equity partners “run the business” and do not provide billable client services at all.
Management time should not be used as a non-billable time category (excuse) to simply “dump” time. Your partners have a right to expect results that improves the bottom line and the size of the pie for all.
Here are a few suggestions:
- Develop a budget for management time and have it approved by the partnership.
- Create a job description for the management partner and have it approved by the partnership.
- Recognize that administrivia (day-to-day office management) and management (higher level concerns) are not the same thing. Hire an office manager or administrator for administrivia – focus your time on the higher level management concerns.
- Ensure that you are using your management time wisely and obtaining results for the partnership.
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VHMA, VetPartners and NCVEI Announce Success Attributes Initiative
What makes some veterinary practices flourish and not others? Three premier organizations–the Veterinary Hospital Managers Association (VHMA), VetPartners, and the National Commission on Veterinary Economic Issues (NCVEI)–have partnered to try to answer this question. The goal of the Success Attributes Initiative is to identify the characteristics and behaviors that are consistent with optimal practice performance and success.
“Our overall goal is to provide those practices that are not running as efficiently as they could be with the tools, resources, and knowledge to manage their practices more efficiently and eventually become more effective and profitable,” states Christine Shupe, CAE, Executive Director of VHMA.
A joint initiative between VHMA, NCVEI, and VetPartners, the first step is to seek information via an online survey from veterinary practices. “We are trying to discover the differences between practices based on their profitability,” states Dick Goebel, DVM, Immediate Past President, VetPartners. “And even more importantly, we are trying to pinpoint what the specific characteristics of high-performing practices are,” adds Shupe.
The second step–validating results and conducting in-depth interviews with the staff at these successful practices–will be underway shortly.
Karen Felsted, CPA, MS, DVM, CVPM, CEO of NCVEI, commented, “One key factor we hope to identify is what tools and resources can best be used to help a practice grow and succeed.”
Results will be available in early 2010, and the key findings will be shared with the industry. “We hope to use what we learn to help practices take charge and become more successful,” concludes Dr. Goebel. “Our aim is to turn these findings into valuable information, resources, and tools that practices can use to implement change in their practice,” adds Shupe.
The Success Attributes Initiative is still looking for more practices to provide insight and aid their fellow industry members. If you are interested in participating, complete the survey now or visit www.VHMA.org and click on the highlighted Success Principles Initiative under Association News.
The National Commission on Veterinary Economic Issues was founded in January 2000 with a mission of raising the economic base of veterinary medicine. A wide-ranging group of benchmarking, pricing, and communications tools as well as other resources are available, free of charge, at
www.NCVEI.org. NCVEI is a not-for-profit organization governed by a Board of Directors representing the three founding organizations: American Veterinary Medical Association, American Animal Hospital Association, and the Association of American Veterinary Medical Colleges. Funding is provided by members of the NCVEI’s Sponsor Council that includes Merial, Hill’s Pet Nutrition, Veterinary Pet Insurance, Fort Dodge Animal Health, Bayer Animal Health, CareCredit, Simmons Educational Fund, and the Western Veterinary Conference.
A non-profit group of professionals, VetPartners serves and advances the veterinary profession with innovative, relevant, valuable, and ethical practice development solutions. Our members view integrity as their highest priority, strive to be responsible leaders, and dedicate themselves to continued personal and professional growth so they can better serve the profession. Our commitment to delivering results through close interaction and partnership is a core value for our members. For more information, visit
The Veterinary Hospital Managers Association (VHMA) is a unique association, created in 1981 by and for veterinary hospital managers. The guiding principles are to pursue excellence in practice management, open channels of communication, and create the opportunity to develop friendships between practices. VHMA offers a certification process for veterinary practice managers, as well as conferences exclusively for management. For more information, visit www.VHMA.org
What happened in Veterinary Practice in the USA in 2009?
You can click here to visit the VHMA website
Record Number of Candidates Sit The CVPM Exam
The examinations for the Certificate in Veterinary Practice Management were held on 4th December 2009 with eight candidates electing to sit either all or part of the examination. Three candidates passed their selected elements and the new CVPMs are:
- Amanda Baggley, Wicstun Veterinary Group, East Yorkshire
- Lisa Cooper, The Goddard Veterinary Group, Wanstead, London
Amanda and Lisa had successfully completed the ILM Level 5 Diploma in Management giving them exemption from the written and portfolio elements of the exam. Their pass in the oral and presentation sections of the examination at this session gave them the necessary top up to achieve the CVPM.
The candidates are managers in very different types of veterinary businesses — verification that the CVPM is applicable and has wide appeal in veterinary management and official presentation of the awards will take place at the VPMA Congress Dinner on 29th January 2010 at the Oxford Belfry Hotel.
Julie Beacham of Wendover Heights Veterinary Centre, Aylesbury was also successful in achieving a pass in the written and oral sections of the examination and will be able to complete her CVPM by submitting and passing the portfolio section of the exam next year.
There are now 57 holders of the CVPM since its inception in 1996. The next examination session will be held on 3rd December 2010 and this will be the last available session for those wishing to take the traditional CVPM written exam. There will be no option to re-sit the written exam after this date. Those wishing to submit portfolios should do so by 31st March 2010 for the opportunity of re-submission if necessary. The final date for portfolio submission is 30th June and notification of intention to sit the exam
must be received by 15th October 2010.
You can click here to visit the VPMA website and download The 2007 Syllabus, Study Guide and Registration document for the CVPM. This is the most recent edition of the syllabus and should be used by all candidates intending to sit or register for the exam.
Implementing the Five Principles
Businesses that deal best with adversity are those that have:
- A clear and compelling vision
- Passionate and engaged employees
- Strong servant leaders
Consider these questions as you think about how to implement the five principles of servant leadership in your business or organization:
See the Future
- Where do you want your team to be in five years?
- How many members of your team could tell you what the team is trying to achieve?
Engage and Develop People
- To what extent have you successfully engaged each member of your team?
- How are you encouraging the development of your people?
- How can we do the work better?
- How can we do it with fewer errors?
- How can we do it faster?
- How can we do it for less? What systems or processes can we change to enhance performance?
Value Results and Relationships
- How much emphasis do you place on getting results?
- How many of your people would say that you have made a significant investment in their lives?
- What are the ways in which you have expressed appreciation for work well done in the last thirty days?
Embody the Values
- What are your team’s shared values?
- How explicit are these values and how can you ensure that they are consistently informing decision-making and problem-solving within your business?
You can click here to visit the Gifted Leaders website
New Year Party Pooper — Are We Heading for A Painful Comedown in 2010
The UK is officially out of recession, so we hear. House prices are on the increase and there’s some good news from the mortgage market.
Officially the green shoots of recovery have punched through and all is looking rosy. Time to sit back safely knowing we rode out the worst of the crisis. But hold on, wasn’t it all just a bit easy?
Sure, some folks lost their jobs and repos on mortgages are up, but compared to what we were expecting from the “worst financial crisis in modern times”, (given what history tells us about the great depression) it wasn’t all that bad. And I doubt if many of us have seen a significant decline in our standard of living?
What’s bothering me is that something just isn’t right with this picture. The facts before us don’t add up with what the economists predicted. As far as I can see, nobody has done anything that would fundamentally improve things. In fact it might be the case that Messers Brown and Darling have done just the opposite.
A Layman’s View
Imagine you are mired in personal debt. The type of debt you just can’t ever hope to pay your way out of. You have an interest only mortgage worth five times the multiple of your earnings. Your house has lost value and you now owe more than your property is worth. Your credit cards are max-ed out and you’re running an overdraft. Things look pretty bad. Your outgoings outweigh your income by so much that you are unable to even service the interest payments on your debt.
There are few ways out of this situation:
- 1. You somehow fluke a miraculous increase in your earnings to be able to service your debt again. (Win lottery or become a drug dealer — both extremely unlikely).
- 2. You take your medicine for some bad decisions and declare yourself bankrupt. You lose everything and start the painful process of rebuilding from the ground up. But with a defunct credit rating you’re going to have to do this the old fashioned way. Pay for goods and services with money you’ve actually earned and saved for over the hard years that followed your glut of debt driven excess. (This option doesn’t win you votes or friends)
- 3. You borrow more in the vain attempt to service your existing debt, with even more debt — on ever worsening terms. In effect putting the pain off for another day, but allowing the size of the problem to get even bigger in the meantime. The higher you fly, the harder you’re ultimately going to fall.
In the global economy right now guess which is happening? Bingo, Number 3.
It just doesn’t add up. The credit bubble we’re trapped in is huge, almost too huge to believe and sooner or later is got to pop. The party has to end, and the mother of all hangovers will be hot on its heels.
The economic hangover we have suffered thus far really doesn’t match the size of party we’ve all had for the ten years prior.
Three party poopers for 2010
For this lay observer things aren’t over yet though. And these are three of the things that I’m concerned about.
- People who have jobs are going to see a reduction in the value of their money. And when inflation gets going (oil prices, food prices, etc) we’ll see these effects exacerbated in higher prices for everyday things. Without the attendant wage increases to compensate (who’s giving out pay rises right now?), confidence will take a hit. People will have less money and spending on luxury items – including pets — will be at risk.
- Lots of people are hanging on to their homes by their fingertips. Low UK interest rates are keeping debt payment artificially low. This is allowing millions of UK borrowers the opportunity to stay afloat. It won’t last forever. When the government removes it’s support for banks later this year and/or inflation begins to creep into the system interest rates will climb. Defaults on mortgages will rise and things could get messy. Again less money for spending.
- Unemployment is still rising. We’re almost up to 2.5 million or 7.9% of the workforce and although for now that figure is seemingly slowing down, it won’t take much for it to start climbing faster again.
Am I wrong? I’d love to be. Things are very, very finely balanced. Anecdotally, for now at least, people seem happier to give up a holiday abroad or a nice meal out, rather than not have their pet treated. But if things get really nasty can we rely upon that forever? I doubt it. Look for rising numbers of pets in shelters.
The next 12 months will be amongst the most interesting and potentially exciting in recent history. How our profession fares will come down a lot to how we manage our businesses. We cannot control the wider environment but we can position our businesses to weather the storm.
Dave’s Resolutions for the New Year
- Run a tight ship – control your costs and capture your missing charges
- Be the best at something — what makes you different?
- Communicate why you’re the best — make the money you spend on marketing really count.
- Look for opportunities – as always there will be winners and losers. If you’re looking to get bigger then my guess is that there will be bargains to be had in the next 12 months.
- Don’t believe the hype — use your head! This is election year, politicians on all sides will tell us anything.
At the risk of sounding like Ricky Fulton’s glum character the Rt. Rev. I.A.M. Jolly, Happy New Year and good luck in 2010.
Never Miss a Good Chance to Shut Up
While visiting Henderson Advertising Agency in Greenville, South Carolina, I noticed this posted advice from Chairman and CEO Ralph Callahan: “Never miss a good chance to
shut up.” I applaud that advice–with gusto.
Briefly, here are my favorite tips for “shutting up” during conversations:
- Listen with an open mind. You will reduce confusion and conflict, and get an accurate picture of what’s said.
- Listen visually as well as audibly. Maintain eye contact, and stay away from rude distractions like e-mail and texting, or checking your watch, cell phone, or beeper.
- Listen with empathy. Move beyond the factual statements to sense what the speaker is feeling.
- Listen patiently. Yep, some people take longer to get to the point, but often it is worth the wait.
- Listen to constructive criticism without becoming overly sensitive. Candid colleagues help us improve our performance and add new skills.
- Listen without quietly composing your response. Your full attention will be far more effective than a structured reply.
You can click here to visit Bill Lamptons website