Criteria And Guidelines For The Promotion And Admission Of .

Emotional intelligence & resilience, Analytical skills, Mental agility and Creativity, Mentoring and Coaching skills. These underlyingskills and competencies to meet the firm’soutcomes and goals in the principal areas ofperformance tend to become – for the LawFirm at least - part of the sub-text, but aresignificant tools for building partner development and assessment frameworks. Somefirms may have a dozen of more competencies to consider in this context.Our preference is to define – for every areaof CAP within the ‘T’ – the competencieswhich are needed to perform well withinthat area and the behaviours which successful lawyers display in demonstratingtheir level of skill and competency. Take forexample, the area of financial and businessperformance. The first step is to define theessential skill or competency level which anincoming equity partner might be expectedto have. This might read something like “hasthe ability to make a significant contributionto the overall growth and profitability of thefirm”. The next questions to ask are “Whatdo these competencies look like? Whatbehaviours do we see successful partnersexhibiting?” This will then cascade downinto some attributes or behaviours neededto demonstrate successful attainment ofthe required level of skill and competency.These attributes and behaviours in the areaof financial and business performance mightthen look something like:-Financial and Business PerformanceConsistently for at least three consecutive years has achieved the firmsrevenue targets for a salaried partnerEvidences the capability to commanda book of client business of at least xper annumWorks at least 50 hours per weekPlans for and achieves high value mattersAchieves superior performanceagainst chargeable hours targetsMaintains good financial disciplinesNegotiates and prices engagementscommercially and confidently3.3. Step Three: Define the metrics ormeasurable baselineswhich candidateshave to achieveOnce the competencies have been defined,the next step is to consider some measuresor metrics - compact descriptions whichenable us to summarise accomplishmentsand thus to mange both the expectationsand the performance of aspiring partners.Most often, the description is quantitative (number of hours worked or revenuegenerated) but they can also be qualitative(achieving the grade ‘excellent’). Additionally, some of the measures will look at pastachievements whilst some will be more prospective in nature.Outcome measures therefore are used to describe results and accomplishments alreadyachieved. Prospective measures describetwo different types of metric. First, thereare activities and projects which partnershave undertaken but which have yet to showany success or return on the invested time.Second, there are surrogate measures; theseare activities where the cost or the input can Copyright 2011 Nick Jarrett-Kerr All rights reserved www.jarrett-kerr.com2011/05/23 PAGE

MeasuresOutcome Measures (Outputs andResults alreadyachieved)Factual Criteria (Quantative)Hours, Revenue, Realisations,Evidence based client originations and cross-salesAppraisal Objectives metValue/price of engagementsnegotiatedAssessable Criteria (Qualitative)Assessment of contribution basedon internal and external feedbackDirectory ratingsFile and client AuditsComplaints (internal and external)Staff retention ratesProspective Measures (Inputs andPartner Effort):Performance Measures (Activities withfuture or long termimpact)Surrogate Measures(Resources & Timespent/used)Specific BD projects,Documents/Templates etc forKnowledge Management,Time/Effort spent in Clientvisits,Course attendanceGeneral marketing effortsEfforts to develop particularexpertiseDelivery of training, coaching,associate development,Practice area developmentTeamworkAssessments of contributionbased on feedback from clients,partners and staffCalculation of likely outcomes ofprojectsAssessment of chances of successon prospecting effortsPost-course evaluation formsbe measured (such as training expenses),but where no measurable outcome can yet(or sometimes ever) be quantified.The table below setsout some examples.Most firms will give partners credit for bothinputs and outputs. After all, the resultsof effort towards longer term strategicobjectives may not be seen for some time.Even shorter term business developmentactivities may well take more than a yearto bring any reward. Additionally, partnersshould be encouraged to develop new clients and new area of work and not just relyon ‘farming’ the existing client base. As onefirm has made it clear, “We feel a balancedapproach is essential. Whilst outcomes areimportant, the effort and actions taken bya partner in seeking to achieve the business objectives of the firm should also bevalued.” In terms of new entrants to equity,some credit obviously has to be given forboth their perceived potential and activitiesin which they have energetically engaged butwhich have as yet not borne any fruit.What is important in every case is to attemptto describe all the required attributes andcompetencies in terms which will enable twoimportant things to happen. First, it is vitalfor the salaried partner on the equity trackto be able to discuss appraisal objectives interms which specifically help him or her tounderstand what he/she need to do to gain Copyright 2011 Nick Jarrett-Kerr All rights reserved www.jarrett-kerr.com2011/05/23 PAGE

promotion. Second, it is important to satisfyall partners that a fair view of performanceand competency will be taken.As before, the effort in establishing thepromotion measurement criteria will be aninvaluable baseline to inform all aspects ofpartner criteria at every stage on the lockstep.3.4.Step Four: Set upa rigorous but fair assessment processPartners are notoriously suspicious of attempts to evaluate, assess or judge them. Inthe context of promotion to equity status,it is therefore important to be clear on theprocess and methodology used in the decision-making process. The simplest methodis for a committee or board to make anoverall judgement, having considered thecandidates record of achievements, havingtaken into account any views and feedbackwhich might have been expressed to it andon the basis of a business case for the promotion prepared by the candidate or his orher sponsoring department or office.Many professional service firms have established and developed assessment processesfor the purposes of both promotion andremuneration, particularly where there arebonuses or discretionary elements to consider. Some of these systems require a gradingassessment of professionals at every level,and – where such systems are in place – theyare often used for assessing various levels ofpromotion as well. Where a balanced ‘T’ isbeing used, it is important here to recognisethe principle that partners can choose theamount of effort they make in each performance area, through their appraisal objectives, but they must make an effort in eachcategory; a balance will have to be achievedacross all performance areas. Partners can-not pick and choose, and should attain abaseline competency across the board. It isimportant to make to clear that the partnerwill need to show superior performance,above that expected of a salaried or fixedshare partner; what ‘superior performance’looks like will need clarification and definition.A number of larger professional service firms– mostly outside the legal sector – conductpromotion assessment centres. These arelengthy staged tests, interviews and assessments over a period of three times.Candidates are expected to respond to acase study or set of problems, to make apresentation and to submit themselves to anumber of interviews mainly designed to assess the characteristics set out in paragraph3.2. In other firms, an interview process isall that is required although irt is becomingquite popular to require the candidate tomake a presentation in response to a casestudy or problem. Some firms also expectincoming partners to undergo medical andpsychometric testing.3.5.Step Five: Implement a Programmeand Partnership Track for Associates andnon-Equity Partners.There are two aspects to this step.3.5.1.Developmentprogramme for Associates and non-EquityPartnersMost leading global professional servicefirms now have an organized formal training Copyright 2011 Nick Jarrett-Kerr All rights reserved www.jarrett-kerr.com2011/05/23 PAGE

curriculum for the first three years of anassociates career but it is clear that suchdevelopment becomes less formal andmore ad hoc after that. Most firms arehowever now ramping up their efforts toprovide a partnership track for promisingassociates, to evaluate/review progressregularly and to encourage career plans.These often involve self-assessment andgoal-setting, together with the use of abalanced scorecard or career developmentbenchmarks established by the firm. Associates are expected to align their careerplans with the strategic goals of the firmor their practice group and receive regularmentoring and counselling in addition totheir appraisals.tant to have a conversation with them whichmay cause them to leave or may otherwisebe demotivating. Although it clearly helps ifthe promotion criteria are sufficiently rigorous to enable partners to assess their ownchances realistically, nevertheless, it is nevereasy to tell a candidate that he or she is insufficiently entrepreneurial or dynamic.The following process is fairly typical of aprocess and timetable which would usuallystart several months before the start of anew financial year.1.Aspiring Equity Partners are usuallyinvited to indicate their interest to Board inwriting within an agreed timetable. This application is usually encouraged (or discouraged) by the candidate’s mentor, the Practice group head or the Managing Partner.2.Within a reasonable period (to beindicated) after that, the following steps willtake place.a.The aspiring Equity Partners areThe promotion process should be open,clear and sympathetic. This process should usually asked to put forward their applications and to provide a business case forbe conducted in a way so as to avoid, onpromotion, if this has not already beenthe one hand, raising false hopes of aspirdone. Sometimes, the aspiring partner willing applicants or, at the other extreme, ofbe asked to put forward his or her Busibeing arbitrary and susceptible to favourness Plan, whilst the Practice Area head isitism. About a year before promotion,required to provide a more objective andon-track candidates should be given support and objectives which will enable them dispassionate Business Case for his or herprotégé’s promotion.to meet the agreed criteria. Candidatesb.The aspiring applicants are then ofwho are not quite on-track should also beten interviewed. As mentioned previouslyhelped to understand their short-comingsat paragraph 3.4, this can often become aand what they might do to address them.lengthy and detailed process.The partners with whom most firms havec.Promotions are then discussed/apdifficulty are those non-equity partnersproved at a meeting of the Board or thewho, in the view of the firm leaders, arenever going to make it though the promo- Equity Partners and formal invitations toEquity Partnership are then issued, but usution gate. In many instances, firms wouldally subject to a medical and in some caseslike to keep these partners and are relucpsychometric testing.4.Setting and Agreeing Entry TermsIn setting the starting rewards package for anew Equity Partner, three factors have to be3.5.2. The PromotionProcess and Timetable Copyright 2011 Nick Jarrett-Kerr All rights reserved www.jarrett-kerr.com2011/05/23 PAGE

triangulated and aligned.4.1.Market benchmarkingThe first consideration is to establish typical entry level remuneration for new equitypartners at similar firms, and even at globalfirms with which the firm is competing. Additionally, many lawyers are lured away fromprivate practice into banks and corporationsand an idea of competitive salaries outsidelegal practice is also helpful. As time goesby, these benchmarks are becoming moreand more available both formally (Directories and International Business Intelligenceservices) and informally through the firm’sown networks and contacts of good friends.from top to bottom ofthe equityIt is axiomatic in any lockstep structure thatthe partners on the top level of points willbe earning more than the partners at thebottom of the lockstep. We often see a ratioof 3:1 here, with plateau partners earningthree times (or more) the earnings of an entry level partner. Ratios higher than 3:1 appear to be exceptional, at least in the UK andEurope. According to the Lawyer in the UK,DLA Piper are said to have a spread of 5:1,whereas Slaughter and May are at 2:1. Clifford Chance, Linklaters, Freshfields and Allen& Overy all vary between 2.3:1 and 2.5:1 3.4.2.A worthwhile stepup.AnnexeThe starting point for equity partnershipshould show a potential clear step up fromnon equity status, both to provide a worthwhile promotion incentive and to recogniserisk. As profit shares are based on a projection of last year’s profits, many firms nowoffer a safety net (usually individually negotiated) for the first two to three years. As analternative, a number of firms operate theirpoints structure on a three tier system, providing as the base of the three tiers a starting salary which operates as a floor to theincoming equity partner’s package. Hence afloor or ‘salary’ for an incoming equity partner might be fixed at roughly the same levelas his or her salary package as a non-equitypartner, with his or her points package providing the necessary elements of uplift. Analternative approach is to fix these ‘salaries’at roughly the amount needed to align withthe monthly draw.4.3. Preservation ofan appropriate ratioSample Baseline Promotion Requirementsfor Equity Partners1Financial Performance (EconomicCapital)Consistently for at least three consecutive years has achieved the firms revenuetargets for a salaried partnerEvidences the capability to commanda book of client business of at least Rs 4crore per annumWorks at least 50 hours per weekPlans for and achieves high value mattersAchieves superior performanceagainst chargeable hours targetsMaintains good financial disciplines2People Management, Leadership andTeam/Skills DevelopmentHas a strategic grasp of manning3 The Lawyer UK 200September 2007 Copyright 2011 Nick Jarrett-Kerr All rights reserved www.jarrett-kerr.com2011/05/23 PAGE

requirements and plans to ensure appropriate level and mixCreates a dynamic atmosphere forteamworkCoaches and delegates responsiblyDisplays the ability to motivate andinspire peopleProfessional Expertise and TechnicalSkillsRecognised widely as an expert withdeep specialised knowledge in chosen areaof lawConsistently delivers services to meetclient expectationsSeeks and plans for future trends,opportunities and threats, anticipating theneed for changeCascades knowledge throughout thepractice area3Business DevelopmentDevelops and maintains strong andprofitable client/referrer relationshipswhich are critical to the Firm’s successRaises the Firm’s profile nationallyand (where relevant) internationallyEnhances the Firm’s reputation in itschosen marketsAssists the Firm’s efforts to developits differentationShows clear accomplishments inbringing in valuable new work4Client ManagementHas developed a deep expertise inclient industry sectorsAchieves role as trusted adviser orbusiness confidant to major clientsPlans, measures and manages allaspects of Firm’s interface with its clientsPlans innovatively for better servicedelivery5Technical expertise and Contributionto the Firm as an InstitutionVery well established reputation forspecial expertise in a relevant practice areawith a portfolio of successful significant completed transactions/mattersContributes creatively to the strategicplanning of the firm and its implementationContributes to the building of theFirms Intellectual Property including precedents, templates, case management andworkflowsAssists in the development of leadingedge Knowledge Management and high leveltechnical know-howActively helps builds the Firm’s processes and systems which contribute to theFirm’s ability to grow its business includingquality control/improvement, governanceand management structuresContributes to the development of ahomogeneous culture and esprit de corps. Copyright 2011 Nick Jarrett-Kerr All rights reserved www.jarrett-kerr.com2011/05/23 PAGE 10

partners of the highest calibre and introduce partners from other firms. 15. Be linked to internal training and review processes which support the devel-opment of partners' development and im-provement in performance. 16. Recognise that partners have different qualities and should be encouraged to focus on areas where they have strengths whilst