Latest / Wealthy Woman Lawyer Podcast, Helping you create a profitable, sustainable law firm you love / Episode 358 | The Future She Can’t See: Retention, Career Paths, and the Partnership Question

Transcript

Episode 358 | The Future She Can’t See: Retention, Career Paths, and the Partnership Question · 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: Picture this. Your strongest associate walks into your office on a Tuesday afternoon, closes the door, and asks if you have a minute. You know what's coming before she says a word. She has been offered a position at another firm. The salary is close to what you pay her.
• 1:07
  The difference is that the other firm showed her where she could be in five years and you never did. If that scene feels familiar or if you're afraid it's coming, this episode is for you. Today, we're talking about retention, career paths, the partnership question, and why the future your associates weren't shown may be the very reason they keep leaving. Welcome to the Wealthy Woman Lawyer Podcast. I'm your host, Attorney Davina Frederick, founder of Wealthy Woman Lawyer.
• 1:34
  We help women law firm owners scale from 6 multiple 7 figures in gross annual revenue, increase profits, and build firms that run without their constant presence so they can fully fund and still have time to enjoy the lifestyle of their dreams. A few episodes ago, we talked about hiring great associates without matching big loss salaries. One big idea in that episode was that money matters, but money alone doesn't keep good people. Today, we're going further. We're going to look at what does keep them, and that is a future they can see and believe in.
• 2:12
  I built this episode around a law firm owner I'll call Jesse. Jesse's story is a composite drawn from conversations I've had with many women law firm owners over the years. I suspect you'll recognize parts of your own firm in hers. I know I recognize parts of mine from my early years of building a team. Jesse runs a successful firm.
• 2:33
  She has worked hard to get where she is, and a few years ago, she decided it was time to grow. She hired two new associates at about the same time. The first associate, whom we'll call Dana, was further along in her career. She had several years of experience. She knew her way around a courtroom and a client meeting, and she could take on a full caseload with very little handholding.
• 2:57
  The second associate, whom we'll call Lily, was brand new. She had passed the bar a few months earlier. She was bright and eager, learning everything for the first time. She was learning how to manage a file, how to talk to a worried client, and how to draft something that doesn't come back covered in red ink. Jessie did many things right.
• 3:17
  She offered both women the most generous salary she could afford. She added a quarterly bonus based on work billed and collected beyond the hourly requirement. She reasonably believed that if she paid well and rewarded effort, good people would stay, and that worked for a while. Now let's fast forward a few years. Lily isn't a baby lawyer anymore.
• 3:38
  She has real experience under her belt, and she's starting to wonder about other areas of law. She's also wondering whether she should hang her own shingle. From where she stands, the grass looks greener almost everywhere else. Dana is in a different position. She's very good at what she does.
• 3:56
  Clients love her. And she has been one of the firm's most reliable producers. And Jesse has said more than once and in front of the team, I never want a partner. Dana heard that. So Dana has started asking herself a question she can't answer.
• 4:12
  If I stay here for another ten years, will I be where I want to be? The answer she keeps landing on, No. Both of Jesse's associates are considering leaving. What makes this story so common is that Jesse doesn't know why. She pays well.
• 4:28
  She offers bonuses. She has been a fair boss. She believes her firm has a good culture. Everyone seems to get along except for the occasional bad day. From her perspective, she has done everything right.
• 4:40
  However, over time, Jesse's firm becomes a revolving door. New associates come in, get trained at Jesse's expense, and move on. Jesse starts to believe that this is simply how associates are, and quite frankly, she's angry about it and feels a bit used. She decides young lawyers are disloyal, that they want the training, and then they leave. She stops investing in them because she expects them to leave.
• 5:03
  When she stops investing in them, they stop investing in the firm. Many of them quiet quit or take sick days when they aren't really sick. I want to discuss that cycle today because Jesse isn't stuck because of her associates. She's stuck because of something she can't see. Here is the first thing Jesse is missing.
• 5:21
  Compensation answers the question, is this job worth it today? A career path answers a different question. Is this firm worth my future? Jesse answered the first question beautifully, but she never answered the second one. Ambitious people think in chapters, and the associates you most want to keep are ambitious.
• 5:41
  They want to know what the next chapter looks like and what it takes to get there. When they can't see that next chapter inside your firm, they go looking for it outside your firm. That isn't disloyalty. It's ambition with nowhere to go. The second thing Jesse can't see is how much her own words shape the outcome.
• 6:01
  When an owner says, I never want a partner, she usually means something specific. She may mean that she doesn't want to give up control. She may mean that she doesn't want someone else having a say in how she runs her business. She may have had a painful experience once and she refuses to repeat it. She may feel like she can't take money out of the business the way she does if she has other eyes and opinions on the financials.
• 6:26
  Those are legitimate concerns, but what her associates hear is much broader. They hear there is a ceiling here, and you've already hit it. The third thing Jesse can't see is the full cost of the revolving door. Every time an associate leaves, Jesse pays for recruiting. She pays for onboarding.
• 6:45
  She absorbs months of lower productivity while someone new learns her systems, her clients, and her standards. She risks losing clients who had grown attached to the attorney who left. And she loses something harder to measure all the knowledge about her firm and her clients that walked out the door. Add it all up, and replacing an attorney costs far more than most owners expect, and Jesse pays that cost again every time the door turns. The fourth issue she can't see may be the most important.
• 7:14
  Jesse thinks retention is a problem with her associates. In reality, retention, or lack of it, reflects the firm she has built. The firm Jesse built is a great place to learn. It is not yet a great place to grow. Those are two very different businesses.
• 7:31
  There's a hidden cost to Jesse's reputation, too. Word travels in a local legal community. When attorneys see a steady stream of associates cycling through a firm, they start to assume something is wrong there, even when the owner is generous and fair. Over time, that perception makes it harder for Jesse to recruit the very people she most wants to hire. If you're scaling towards 7 figures, you need a firm that is a great place to grow.
• 7:58
  The people you'll rely on to help run that firm need a reason to still be there in year five, year eight, and year twelve. Let's look more closely at associates Dana and Lily because one of Jesse's mistakes was treating them as though they wanted the same thing. When they were hired, they received the same deal, a strong salary and a bonus tied collections beyond the hourly requirement. That structure rewards one thing, personal production. It's a good structure for year one.
• 8:27
  It is not a career. Lily's needs change fastest. A new lawyer's first few years are about learning, and Jesse's firm gave her that. But once Lily became competent, she wanted more. She wanted variety, direction, and the feeling that her development hadn't stalled.
• 8:45
  One recurring thought in Lily's head is, They still see me as the baby lawyer even though I now have three years experience, and they'll never be able to see me as anything else. Some of that restlessness is natural, and some associates will leave no matter what you do. That's okay. Not every departure is a failure, but many associates in Lily's position leave because nobody ever asked them what they wanted next. If Jesse had met with Lily and asked where she wanted be in three years, she might have learned that Lily was curious about a practice area the firm could grow into.
• 9:22
  She might have learned that Lily wanted more client contact or more courtroom time or simply a visible next step. Lily's grass is greener feeling came from not seeing anything green on her own side of the fence, and she has nothing else to compare it to, so she's inviting other opinions from outside the firm. Dana's situation is different, and for Jesse's business, it's far more costly. Dana is the kind of attorney you build a firm around. She's experienced, she's trusted by clients, and she's capable of leading others.
• 9:54
  She doesn't need more training in practicing law. She needs to know that her growth has somewhere to go. And the one person who could show her that has told everyone she never wants a partner. What I find so interesting is that when Jesse says she never wants a partner, she's talking about the end of the road. But Dana isn't asking about the end of the road.
• 10:14
  Dana is asking about the next mile. She wants to know whether there is a next step at all. A lot of ground separates associate from equity partner, but most owners never map it. When you don't map the ground, your best people assume it doesn't exist. So let's imagine a different version of Jesse's firm one where Jesse has built a visible career path for her team.
• 10:37
  This isn't a template that fits every firm it's an example of the kind of thinking that changes the outcome. The first stepping stone is Senior Associate. This promotion isn't a new title for its own sake it comes with real responsibility. The Senior Associate supervises newer attorneys. Lily and the associates who come after her lean on Dana for guidance.
• 11:01
  Dana reviews their work, answers their questions, and helps them develop case strategies. She guides the attorneys and paralegals on her team and gets rewarded a little extra for their performance. That promotion does two things at once. It gives Dana a reason to stay because her role is growing. It also takes supervision off Jesse's plate because Jesse is no longer the only person every associate must come to with every question.
• 11:29
  The second stepping stone is a non equity partner, sometimes called an income partner. This is where the expectations change in a meaningful way. A non equity partner is expected to do more than produce excellent work or supervise other attorneys and staff. She is expected to bring in business and build her own client book. She represents the firm in the community and in her professional relationships.
• 11:55
  She thinks like an owner in training, even though she doesn't own the firm. In exchange, her compensation reflects that larger contribution, often through a share of the business she originates and a share in the firm's overall success. Here is the part most owners skip. Each promotion should come with investment from the firm. When Dana becomes a senior associate, the firm invests in leadership training, so she learns to supervise and develop people rather than figuring it out through trial and error.
• 12:26
  When she becomes a non equity partner, the firm invests in business development training, so she learns how to build relationships and bring in clients. The firm doesn't just hand her a bigger job and hope for the best, it equips her to succeed. The third stepping stone is optional, and it's the one Jesse fears most, It's ownership. In this version of the firm, Dana could use her bonuses over time to buy into the firm. That might happen when Jesse decides she's ready to step back from the day to day work and operations.
• 12:59
  Maybe that's five years from now. Maybe it's ten or fifteen years from now. The point is that the door exists and Dana knows what it would take to walk through it. One reason law firm owners hesitate to offer associates the opportunity to buy into the firm is that they automatically think they must make a fiftyfifty offer, but that's far from the truth. Buying into a firm can happen at 05%, 1%, 5%, or any other percentage that feels right.
• 13:28
  Maybe they aren't sure of their firm's value, so they don't know how much to ask for a particular percentage. While that is scary, there are solutions. You don't have to have all the answers at once, and you can ask for guidance from experts. Look at what that path does for Jesse. She keeps her best attorney.
• 13:46
  She develops a leader who can supervise and train the next generation of associates. She adds a rainmaker who grows the firm's revenue without Jesse having to bring in every client herself. And she creates a possible successor, someone who knows the firm, the clients, and the culture, and who has a financial stake in keeping the firm strong when Jesse is ready to scale back. In Episode three forty four, we talked about law firm valuation and exit planning. One of the biggest drivers of a firm's value is whether it can run without its founder.
• 14:20
  A firm with a developed leadership bench and possibly an internal buyer has real enterprise value. A revolving door of associates, no matter how well paid, doesn't build that kind of value. Now, I can hear some of you saying, Devina, I hear you, but I still don't want a partner. I respect that. This episode isn't about telling you that you must bring in an equity partner.
• 14:43
  It's about making sure your answer to the partnership question is a strategic decision and not a reflex because you don't want to give up 100% control. So, let's talk about what usually lies beneath the words, I never want a partner. For many women law firm owners, the firm is deeply personal. You built it yourself. You took the risk.
• 15:06
  You made payroll in the lean months. Having someone else hold an ownership stake can feel like giving away a piece of yourself. Some owners have watched partnerships fall apart, either their own or someone else's, and they've decided they would rather go it alone than go through that again. Others worry about losing control over decisions, over profit, or over the culture they've worked so hard to create. Those are real concerns, and they deserve real attention.
• 15:35
  But notice that every one of them is about equity ownership, and equity ownership is only the final step on the path. You can build a firm with senior associates, non equity partners, and meaningful profit sharing without ever giving up a single share of ownership. You keep control, and your people still have a future. You can also design ownership on your own terms if and when you decide to offer it. A buy in can be structured, it can be gradual, it can be tied to clear performance standards, and it can be timed to match your own plans for stepping back.
• 16:10
  Ownership doesn't have to mean handing over the keys tomorrow. It can become part of your exit strategy a way to get paid for the value you've built while the firm continues serving clients after you step away. So the question isn't, Do I want a partner? A better question is, What do I want this firm to look like in ten years, and who will help me build it? Answer that question first, and the partnership question tends to answer itself.
• 16:36
  Sometimes the answer is equity. Sometimes the answer is a non equity track with generous profit sharing. But the answer should never be, There's nowhere to go here, because that answer guarantees the revolving door. There's one more thing to consider. Whatever you decide, tell your people.
• 16:55
  Clarity is a retention tool. An associate who knows the path, even one that doesn't include equity, can commit to it. An associate who hears the word never and nothing else will make her decision without you. So far, we've talked about structure, titles, promotions, and partnership. But structure alone won't fix Jesse's firm.
• 17:17
  A career path only works if the owner manages in a way that develops people. That's the second shift Jesse needs to make, and for many owners, it's the harder one. Let's be clear about what Jesse's management looked like. Like many successful owners, Jesse is excellent at practicing law, and she knows exactly how she wants things done. So, she reviewed everything.
• 17:41
  She rewrote drafts herself instead of explaining what needed to change. She took over client calls whenever they got difficult. She answered every question herself, which meant every question came to her. From Jesse's side, all of that felt like protecting quality. From her associate's side, it felt like never being trusted.
• 18:01
  Micromanagement sends a message even when the owner doesn't intend it. It tells your associates they aren't growing because if they were, you'd let go. Talented people don't stay long in an environment that tells them they'll always need supervision. I know this one well from my own experience. When I first built a team in my law firm, I was convinced that reviewing everything was what kept our quality high.
• 18:26
  It kept my workload high. It took me a while to see that my people couldn't grow into the space I wouldn't leave for them. Jesse needs to make a shift in three parts, training, rewards, and systems. The first part is training. There's a big difference between correcting someone's work and training someone to do the work.
• 18:46
  Correcting is fast in the moment and expensive over time because the same mistakes keep coming back. Training takes more effort upfront and it builds an attorney who doesn't need you to review every page. In a scaling firm, training must be intentional. That means a defined onboarding process, clear standards for what good work looks like, and regular development conversations, not just feedback when something goes wrong. It also means training people for the next role, not only the current one.
• 19:18
  If Dana is going to become a senior associate, she should learn to supervise before she gets the title. The second part is reward. Jesse's bonus structure rewarded one thing, hours billed and collected beyond the requirement. That's a reasonable starting point, but it's narrow. It rewards Dana for working more hours.
• 19:39
  It gives her no reason to mentor Lily, bring in a new client, or improve a firm process because none of those things show up in her bonus. Owners get the behavior they reward. If you want leaders, reward leadership. If you want rainmakers, reward origination. If you want people who help build the firm, make building the firm part of how they're recognized and paid.
• 20:02
  And remember that rewards aren't only financial. Promotions, titles, autonomy, responsibility for a practice area, and public recognition all matter a great deal to the people you're trying to keep. The third part is systems. Systems are what make it possible for Jesse to stop micromanaging without things falling apart. When a documented process shows how a matter moves through the firm, a clear quality control step exists, and regular meeting rhythm reviews work and reveal problems and solutions.
• 20:35
  Jesse doesn't need to personally check every file to know the work is good. Systems give the owner confidence and the team clarity. Everyone knows what's expected, how success is measured, and what it takes to move up. That clarity is a huge part of what keeps good people. Ambiguity drives people out.
• 20:53
  Clear expectations applied consistently keep them in. When you put those three pieces together, something important happens. The owner stops being the bottleneck. The associates start growing. And the career path we described earlier becomes believable because the associates can see the firm investing in their development every day, not just promising a title someday.
• 21:18
  Let's go back to Jesse and imagine the same story with these shifts in place. When Jesse hires Dana and Lily, she still offers a strong salary and a bonus. But in the first month, she also meets with each of them separately and walks them through the firm's career path. She shows them what a senior associate does, what a nonequity partner does, and what the firm expects at each level. She tells them a path to ownership exists for anyone who earns it, and she's clear about what that would look like.
• 21:50
  Lily still gets her training, but now it's structured. And every six months, she and Jesse talk about where Lily wants to go. When Lily becomes curious about another practice area, Jesse asks whether the firm could grow into it. Maybe it is a good fit, and Lily ends up building that practice area inside Jesse's firm. Maybe it isn't a good fit, and Lily eventually leaves on good terms as a referral source and an advocate for the firm.
• 22:16
  Either way, Jesse isn't blindsided, and she didn't lose her investment without a conversation. Dana becomes a senior associate in her second year. The firm sends her to leadership training. She starts supervising new associates, which frees up hours of Jesse's week. A few years later, she becomes a non equity partner.
• 22:35
  The firm invests in her business development skills, and she begins bringing in her own clients. Her bonuses grow with her contribution. And when Jesse starts thinking about stepping back from day to day operations, she already knows who she talked to first. In the first version of this story, Jesse built a training ground. In the second version, she's built a legacy.
• 22:58
  Notice also that Jesse didn't have to pay dramatically more to get there. Most of what changed was visibility, investment, and the way she led. Her people could easily envision the future within her firm. So let's bring this together. If your firm feels like a revolving door, the problem probably isn't your associate's loyalty.
• 23:16
  It's worth asking a few questions about your own behavior and your law firm structure to ask yourself, Can my associate see a future here? Do they know what the next step is and what it takes to get there? Am I investing in developing them for that next step? Or am I only correcting their work? Does my compensation reward the behavior I want, or does it only reward hours?
• 23:40
  And have I made my partnership decision strategically, or have I let the word never make it for me? None of these questions require you to have everything figured out today. They require you to start seeing your firm the way your best people see it, as a place where they are deciding whether to invest the next chapter of their careers. Scaling to 7 figures and beyond requires leaders who aren't you. The firms that get there aren't simply the ones that hire the best people.
• 24:12
  They're the ones that give the best people a reason to stay and a path to grow. If you see yourself in Jesse's story, I'd love for you to reach out. Maybe good people keep walking out your door. Maybe you aren't sure what a career path in your firm could look like. Maybe you're wrestling with the partnership question and don't know where to start.
• 24:33
  Whatever it is, you don't have to figure it out alone. At Wealthy Woman Lawyer, we work exclusively with women law firm owners who are ready to build multimillion dollar law firms that can operate smoothly, even in their absence. We help you build the leadership systems and structure for a wealth generating law firm business you can sell one day if you want to. Head over to wealthywomanlawyercom and click the Apply button to schedule a practice growth needs assessment call with our team. We'll look at where your firm is today, where you want it to go, and what's standing in the way.
• 25:09
  Thank you for listening to the Wealthy Woman Lawyer Podcast. If this episode resonated with you, please share it with another woman law firm owner who's ready to stop training her competition and start building her leadership team. Until next time, I'm Devina Frederick, and I'll see you on the next episode.
• 25:27
  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 at wealthywomanlawyer.com to learn more about how we help our clients create wealth generating law firms with ease.