Teaching associates to be profitable

One topic very few law firms, small or large, ever discuss with associates is why and how they can/should be profitable.

When I was practicing as an associate, I had a conversation with the managing partner. The subject of profits and billing came up, though I don’t remember how or why. I showed him what percentage my billings were of the firm; I showed him what my expense to the firm was. (Most of these numbers were available at that time; they may be more difficult to get today.) And I showed him what my “profit” to the firm was (though I had no clue about the realization rate of my billings by the firm).

After getting over the shock that I would attempt to have that information, he asked me why I kept that information. I told him that I enjoyed my job, that I wanted to keep it and that I knew that the firm could/would not keep me if I were not profitable for them. I didn’t need to be profitable every month, but I needed to be profitable for the year.

After that discussion, probably 6-9 months later, I was invited to become a partner. They figured that few in the firm understood or cared about the firm’s profits and they wanted someone who did ….

Associates today need to be more sensitive to the needs of the firm. When I’ve seen the “numbers presentation”, it has tended to be too abstract. If the presentation is at the personal level, the lawyer/associate may understand what/why they need to be concerned about the firm’s health and their part in the process.

In fact, many attorneys who are the principals of their own firm don’t really have a good “handle” on this information.


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