Choosing between food and rent
In a conversation today with a client of mine, he presented me with an interesting dilemma. He is a sole practitioner with two associates. They both acknowledged that they were down to 50% capacity.
His dilemma now: What is his best choice?
1. Fire one of the two lawyers
2. Take work from his desk and transfer it to them ... this would give him more time to market the firm or more leisure for himself, but it wouldn't immediately increase the firm revenue
3. Have the two associates begin to focus more on practice development efforts that are within their comfort zone to take up the slack time and hopefully succeed in additional revenue
What are your thoughts? Are there other options you can suggest?
He would like to keep both associates fully occupied. But, if he can't, it's like choosing between food and rent. You need both but can't afford to pay full boat to do so.
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I'd keep both and invest on training, CLE and transfer some of my desk and Know-how to them. Meanwhile I'd reduce their fixed income (which I should pay monthly), let's say down to 50%, and increase their variable income; for example 65% of fees derived from their work should go to to them as soon as cash is received from clients.
As an attorney who was formerly in the associates' position, I have to wonder why they are not driving the conversation about how they can help develop new business. What have they been doing during their downtime so far? Fifty percent is pretty significant. If they have been catching up on old newspapers, then I am not sure how much value they add to the practice.
Your colleague is running a business, and there are plenty of work-hungry attorneys eager to find paying work. Unless his associates bring something to the table, he really has to look at this as a business decision, plain and simple. I agree with Karim's suggestion, but the associates must understand that their job security, and not just their salary, is at stake.