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Resolving Partner Conflict

The newest partner — who was coincidentally the first non-founding partner in the firm — raised a red flag when he realized that conflict among the partners was a serious issue that could, he felt, tear the firm apart. We were asked to help.

We spent time with each of the partners and learned that the conflict stemmed not from how they practiced, but rather from stress that centered on partners' individual personal situations. The firm had grown significantly since its inception, and until the period of stress, the partners met frequently, formally and informally, to talk about things related to the practice, to specific projects, and about their lives outside the firm. The stresses led the partners to reduce considerably their communications, to the extent that they discussed only things that were causing client- and project-related fires. Further compounding the problem in the firm was that external personal circumstances reduced the time available for two of the partners to give adequate attention and effort to client, project, and firm matters. The burden on the other two partners increased, and, as might have been expected, so did their resentment.

The situation continued to escalate until we helped the four partners restore the ongoing dialogue that had been an important aspect of their leadership and management style in earlier years. We facilitated conversations among them that aired concerns and helped them get comfortable with talking with each other (rather than about each other), and helped them learn to provide timely feedback to each other when things were off course as well as when they were on course. Once it was clear that the communications and decision making were improving, we helped them define roles and performance expectations for each. We also developed a compensation plan that reinforced preferred performance and results, and the plan also acknowledged that ideally all partners will perform at a very high level, thereby avoiding the need for performance-based compensation differences. Some of the things that we helped institute, such as a partner communication component that focuses on "how are we doing as partners?" continue to this day, several years after our initial intervention.

Some observations:

  • In most firms, owners are more effective when they regard each other as partners, rather than simply as practitioners who happen to have ownership in the same business.
  • There is too much going on, even in a small or mid-sized firm, for owners not to communicate regularly and openly on all aspects of practice and on outside things that can have an effect on the practice.
  • An effective compensation plan rewards desired results and desired behaviors.