Latest / Wealthy Woman Lawyer Podcast, Helping you create a profitable, sustainable law firm you love / Episode 356 | The Loyalty Trap: Why Keeping the Wrong People Too Long Costs More Than Letting Them Go

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Episode 356 | The Loyalty Trap: Why Keeping the Wrong People Too Long Costs More Than Letting Them Go · Wealthy Woman Lawyer Podcast, Helping you create a profitable, sustainable law firm you love

• 0:01
  Intro: Welcome to the Wealthy Woman Lawyer Podcast. What if you could hang out with successful women lawyers, ask them about growing their firms, managing resources like time, team, and systems, mastering money issues, and more. Then take an insight or two to help you build a wealth generating law firm. Each week, your host, Devina Frederick, takes an in-depth look at how to think like a CEO, attract clients who you love to serve and will pay you on time, and create a profitable, sustainable firm you love. Devina is founder and CEO of Wealthy Woman Lawyer, and her goal is to give you the information you need to scale your law firm business from 6 to 7 figures in gross annual revenue so you can fully fund and still have time to enjoy the lifestyle of your dreams.
• 0:47
  Now here's to Vina.
• 0:50
  Davina: Think about the person on your team you would never want to lose. Maybe she has been with you since the early days when it was just the two of you in a borrowed conference room. Maybe she knows your clients by name, your preferences by heart, and where every file in the building lives. Now think about the person on your team you avoid. She is the one whose name makes your stomach tighten when it pops up in your inbox.
• 1:14
  She is the one you manage around instead of managing. Here is the uncomfortable question for today. What if those two people are the same person? Welcome or welcome back to the Wealthy Woman Lawyer Podcast. I am your host, Attorney Devina Frederick, two time author of books on law firm marketing and management and founder of Wealthy Woman Lawyer, a company that guides women law firm owners in cultivating the mindset, the strategies and the systems to scale their firms to and through 7 figures in gross annual revenue without burning out in the process.
• 1:49
  I am so glad you are here with me today. Today, we are talking about loyalty. Specifically, we are talking about the moment loyalty stops being one of your firm's greatest strengths and starts becoming a ceiling on its growth. I call it the loyalty trap, and it is one of the most expensive patterns I see in women law firm owners who are scaling from 6 figures to 7. It does not show up on your profit and loss statement as its own line item, but it is in there.
• 2:24
  It shows up in turnover, in lost clients, installed growth, and in the hours you spend managing drama instead of leading a business. By the end of this episode, you will understand why keeping the wrong people too long almost always costs more than letting them go, and you will be able to recognize whether the loyalty trap is already operating inside your firm. Let me start by saying something clearly. Loyalty is not the problem. Loyalty is a good thing.
• 2:56
  The women I work with are loyal to their clients, loyal to their teams, and loyal to the people who believed in them before anyone else did. That loyalty is part of why their clients trust them and why their early team members stuck around through the lean years. The trap begins when loyalty to one person starts to outrank loyalty to everyone else. That includes the rest of your team, your clients, your firm's future, and you. In a small firm, this imbalance is easy to miss.
• 3:27
  When you have two or three people, everyone's quirks get absorbed into the daily rhythm. You know that your paralegal needs a long lunch on Thursdays because of a family situation. You know that your associate gets prickly when someone questions her work. You adapt because adapting is easier than confronting and because the work gets done. Then you start to grow.
• 3:49
  You hire more people. You bring in systems. You add structure where there used to be personal workarounds. Suddenly, the accommodations you made for one or two people are no longer private arrangements. They become part of your culture.
• 4:03
  New team members see them. They notice who follows the rules and who does not. They notice who gets corrected and who gets excused. This is where conflict avoidance becomes a growth issue. Many of us were raised to keep the peace.
• 4:17
  We were praised for being agreeable, for smoothing things over, and for taking care of everyone around us. Those instincts can make you a wonderful advocate and a compassionate boss. They can also make you the owner who rehearses a difficult conversation in the shower for six months and never has it. Here is what makes this pattern so hard to see from the inside. Conflict avoidance rarely feels like avoidance.
• 4:42
  It feels like patience, compassion, or picking your battles. You tell yourself the timing is not right, that she is going through a hard season, or that things will settle down once the busy stretch ends. Each of those reasons may be true on its own. The trouble is that there is always another hard season and another busy stretch, and the conversation keeps moving to next month. A solo practitioner can survive conflict avoidance.
• 5:10
  A 7 figure firm cannot. The bigger your team becomes, the more people are affected by every conversation you decline to have. Let me tell you about a client I will call Danielle. Danielle owns a family law firm, and for most of her first decade in practice, she ran it with a very small team. Two people were at the heart of it.
• 5:30
  The first was her paralegal, whom I will call Carla. Carla was what Danielle described as a unicorn. She was fast and smart. She anticipated what Danielle needed before Danielle asked. And the clients adored her.
• 5:45
  Carla also had a great deal going on in her personal life. There were relationship upheavals, financial crises, and family emergencies that seemed to arrive every few weeks. She had strong moods and some personality quirks that made her difficult on certain days. Danielle absorbed all of it. She covered for Carla when she disappeared for an afternoon, listened when Carla needed to vent, and told herself it was a fair trade for the quality of the work.
• 6:12
  The second was a contract associate I will call Jen. Over the years, Jen became something like Danielle's work wife. They shared inside jokes, strategized cases over late dinners, and had a shorthand that came from years in the trenches together. Jen could be territorial and stubborn, and she did not love being told what to do. Danielle let that slide too because Jen was good in the courtroom and the clients loved her.
• 6:38
  Then Danielle made a decision that I celebrate with every client who makes it. She decided to build a real business. She hired an operations manager whom I will call Monica. And Monica did exactly what Danielle hired her to do. She documented processes.
• 6:54
  She built systems for intake, case management, and client communication. She helped Danielle expand the team with two more young associates and several administrative positions. Then, they turned on a powerful marketing funnel, and the leads started coming in at a pace the old firm could never have handled. By every outside measure, Danielle's firm was taking off. Inside, the foundation was cracking.
• 7:21
  Carla and Jen did not like the changes. On the surface, they objected to the new policies and procedures. Underneath, the real issue was that the changes threatened their relationship with Danielle. For years, they had been the inner circle. They had direct access, special arrangements, and a level of influence no one else had.
• 7:42
  Now there was an operations manager between them and Danielle, a set of systems that applied to everyone, and a growing team of new people who were also important to the firm's success. Carla's personal problems, which had once been contained inside a three person office, began spilling into a much larger workplace. Her mood set the tone for entire days. New team members did not know how to read her or work around her, and they should not have had to. Her absences created bottlenecks in systems that depended on everyone doing their part.
• 8:16
  The chaos she had always brought with her now landed on people who had not signed up for it. Eventually, Danielle had to let her go. It was painful, and it was overdue. Jen's path was different, but it was just as costly. She became increasingly difficult to work with.
• 8:32
  She refused to collaborate with the new associates. She ignored the new case management procedures and did things her own way, which meant her files did not match anyone else's, and no one could step in to help her. When Monica pushed back, Jen went around her straight to Danielle, and for a while, let her. Eventually, Jen decided to leave and open her own competing firm. On her way out the door, she recruited as many of Danielle's new employees as she could, and she reached out to several of the firm's clients.
• 9:03
  Danielle came very close to losing most of her team and a significant portion of her client base, along with the revenue those clients represented. When we talked through what happened, Danielle identified two sentences she had been telling herself for years. The first was, The clients love them. The second was, As long as the work gets done. Both statements were true.
• 9:25
  Neither was a good enough reason to keep tolerating behavior that would never have been acceptable from anyone else on the team. Danielle did not create this problem in a single moment. She created it in hundreds of small moments over many years. Every time she excused, accommodated, or looked the other way, each one felt kind. Together, they taught Carla and Jen that the rules did not apply to them.
• 9:50
  And when the firm grew, the rest of the team learned the same lesson. When women law firm owners think about letting someone go, they tend to focus on the cost of the departure. They think about recruiting a replacement, training someone new, the clients who might be disappointed, and the hole in the schedule. Those costs are real, and they are easy to see. What is harder to see is the cost of keeping the wrong person.
• 10:15
  That cost builds slowly, and you pay it every single day. The first cost is your best people. High performers notice when someone else is held to a lower standard. They notice when their hard work is treated the same as someone else's chaos. Your strongest team members are also the most marketable, and they are the first to leave when they decide leadership is not going to fix the problem.
• 10:38
  When you keep a difficult employee to avoid one painful departure, you often trade it for several departures you did not see coming. The second cost is your systems. Every system you build depends on consistent use. When one person is allowed to opt out, the system stops working for everyone. Files get out of sync, handoffs break down, and the operations manager you hired to build structure spends her time chasing exceptions.
• 11:04
  You end up paying for systems without getting the benefit of them. The third cost is your clients. In Danielle's story, the clients loved Carla and Jen. That is exactly what made the departure so dangerous. When client relationships are tied to individual people rather than to the firm, those relationships are portable.
• 11:24
  A client who loves your associate can follow your associate across the street. The longer you let one person own key relationships without firm level systems around them, the more of your revenue lives inside one person's contact list. The fourth cost is your time and energy. Think about how many hours you spend managing around a difficult person. You mediate conflicts, soften feedback, redo work, explain decisions twice, and lie awake rehearsing conversations.
• 11:53
  That is time you are not spending on leadership, strategy, or growth, and it is time that never comes back. The fifth cost is your credibility as a leader. Every time you say a policy applies to everyone and then make an exception for one person, your team learns that your words are negotiable. That makes every future change harder because your team will wait to see whether you mean it this time. When you add all of that up, the math is not close.
• 12:22
  The cost of letting someone go is a one time expense you can plan for. The cost of keeping the wrong person compounds, and by the time it becomes obvious, the bill is usually much larger than it needed to be. There is another side to the loyalty trap that I see just as often, and it can look like the opposite problem. Some owners hear advice about delegating, letting go, and not micromanaging, and they take it to an extreme. They step so far back that they lose touch with what is happening on their teams.
• 12:56
  They tell themselves they are trusting their people. What they are often doing is avoiding the discomfort of being involved in difficult dynamics. One law firm owner I worked with did not want to be a micromanager. She had worked for one early in her career and promised herself she would never become that kind of boss. So she took a very hands off approach with her attorneys.
• 13:18
  She gave them space, rarely checked in, and assumed that if something was wrong, someone would tell her. Then three attorneys quit in short order. She was blindsided. Because they left so she ended up holding onto a fourth associate who was not performing well simply because she could not afford to lose another lawyer while she was rebuilding. She knew that associate was not the right fit, but the departures had put her in a position where she had no good options.
• 13:46
  Eventually, she rebuilt her firm stronger with better associates who were aligned with her vision. But the impact of losing three attorneys and later having to let the fourth go caused her annual revenue and profits to dip during the rebuild. The lesson here is not that she should have micromanaged. The lesson is that staying connected to your team is part of leadership. Distance did not prevent the conflict it only meant she found out about the problems after they had already turned into resignations.
• 14:17
  Here is a contrasting example. Another law firm owner I know had also stepped back from daily interaction with her team, which was the right move for her role. Over time, she noticed that one employee had developed a negative attitude and that the negativity was spreading. Conversations got more cynical. Small complaints turned into group grievances.
• 14:41
  The energy of the whole office was shifting, and she faced a choice. She could step back into the daily work, start taking assignments back, and try to fix the mood by being present in the weeds again. That would have felt productive, but it would have undone years of work building a team that could operate without her. Instead, she made a leadership decision. She let the employee who was spreading negativity go.
• 15:07
  Then she gathered her team and reminded them that she had hired them to do the work they were paid handsomely to do. She raised her expectations of them and made it clear what those expectations were. That is the difference between avoiding conflict and leading through it. She did not take the work back and she did not look the other way. She removed the problem, reset the standard, and trusted the people who remained to rise to it.
• 15:34
  Her team respected her more for it, and the culture recovered quickly because the source of the problem was gone. So how do you know whether the Loyalty Trap is operating in your firm? Here are the signs I see again and again. As I go through them, notice which ones feel familiar. The first sign is that you find yourself saying, But the clients love her.
• 15:58
  When client affection is your main argument for keeping someone, it usually means the other arguments have run out. The second sign is that you manage around someone instead of managing her. You adjust schedules, reroute assignments, or warn new hires about how to handle a certain person. If your team needs an orientation on one coworker's moods, that is a problem. The third sign is that some rules apply to everyone except one or two people.
• 16:26
  If your newest employee would be corrected for something your longest tenured employee does every week, your team has noticed. The fourth sign is that you have been planning a difficult conversation for months. If you have rehearsed it many times and still have not had it, the delay itself is costing you. The fifth sign is that new hires are not staying or they are telling you, sometimes indirectly, that the culture is difficult. When good people leave shortly after joining, look closely at who they were working with.
• 16:59
  The sixth sign is that you feel relief when a particular person is out of the office. That relief is information. Your body often knows what your loyalty does not want to admit. The seventh sign is that you justify current behavior with past history. You hear yourself say, She was with me when I had nothing, or She stuck with me through the hardest year of my practice.
• 17:23
  Those things matter, and gratitude is appropriate. Someone's past contribution does not entitle her to undermine your firm's future. The eighth sign is that you have stepped so far back that you no longer know how your team is doing. If you would be surprised to learn that one of your attorneys is unhappy, you are too far away. If you recognize your firm in two or more of these, you are not alone, and it is not a character flaw.
• 17:50
  It is a very common pattern for women who built their firms on relationships. It is also a pattern that has to change if you want to scale. Here is the reframe I offer every client who struggles with this: Letting the wrong person go is not disloyal. It is loyalty to the right things. It is loyalty to the team members who show up, follow the systems, and do excellent work.
• 18:16
  They deserve a workplace where their effort is not undercut by someone else's chaos. It is loyalty to your clients, who deserve a firm that serves them consistently, no matter which person they talk to. It is loyalty to the vision you have for your firm and for your own life. You did not build this business to spend your evenings managing one person's moods. In many cases, it is also loyalty to the person you are letting go.
• 18:44
  Someone who is unhappy with the direction of your firm, who resists every change, or who is struggling in ways the job is making worse is not thriving either. Keeping her in a role that no longer fits is not kindness. It only postpones a transition that may be better for both of you. There is a difference between being nice and being kind. Nice avoids the hard conversation so everyone stays comfortable today.
• 19:10
  Kind has the hard conversation because it cares about what happens next. 7 figure firm owners learn to lead with kindness rather than niceness. The best time to address a mismatch is early, while it is still small. The second best time is now. Danielle's story did not have to unfold the way it did.
• 19:32
  If she had addressed Carla's impact and Jen's resistance when the first signs appeared before the new team arrived, she could have made those transitions on her own terms. Instead, the transitions happened on their terms at the worst possible moment. As you grow, the people who helped you build the first version of your firm may not be the people who can help you build the next one. Some of them will grow with you, and those people are treasures. Some of them will not, and that is not a failure on either side.
• 20:01
  Recognizing the difference and acting on it is part of becoming the leader your firm needs. Let's bring this together. Loyalty is one of your greatest strengths, but when loyalty to one person outranks loyalty to your team, your clients, and your vision, it becomes a ceiling. Conflict avoidance feels safe in the moment, but it compounds into lost talent, broken systems, portable client relationships, and lost revenue. Stepping back from your team is also not the same as leading it.
• 20:32
  The owners who scale stay connected, set clear expectations, and act when someone is no longer the right fit. If you heard yourself in Danielle's story, or you counted more than a couple of those warning signs, I would love for you to take the next step. At Wealthy Woman Lawyer, our team works with women law firm owners to build the team, the systems, and the leadership foundation a 7 figure firm requires, including a culture that holds everyone to the same high standard. Schedule a practice growth assessment call by visiting wealthywomanlawyer.com and clicking the Apply button at the top of the page. On that call, we will look at where your firm is today, what may be holding it back, and what it would take to grow to and through 7 figures with a team you can trust.
• 21:21
  Thank you for spending this time with me today. If this episode resonated with you, please share it with another woman law firm owner who may need to hear it and leave us a rating and review wherever you listen. Until next time, keep building the firm and the life you deserve.
• 21:39
  Intro: If you're ready to create more of what you truly desire in your business and your life, then you'll want to visit us wealthywomanlawyer.com to learn more about how we help our clients create wealth generating law firms with ease.