Law Firm Governance
The clear assignment of responsibilities for smoother decision-making within the firm
The term “governance” can seem abstract or amorphous, but in our view it shouldn’t be mysterious. It primarily consists in the “executive” functions of the firm for the smooth and ideally nearly-frictionless day-to-day management of the firm’s essential administrative tasks – the “operations” functions.
Governance cannot be treated as an afterthought or a peripheral and slightly unworthy pursuit. It should be seen as facilitating improved client service and lawyer performance through clarifying and streamlining the process of how decisions get made and who makes them—and where the practice of law ends and the economics and business of the firm begin.
The ideal governance system is “invisible” on a day-to-day basis, meaning that “how decisions get made and who makes them” seems logical and obvious to all concerned. A different way of expressing the same goal is to observe that optimally functioning governance systems minimize friction and “overhead” surrounding decisions.
At Adam Smith, Esq. we’ve had the good fortune to work with a number of top firms on the full range of governance issues. This has included guidance on partnership agreements, updating the processes for elections, voting, nominations, terms and term limits, capital contributions and repayments, partner additions and expulsion (thankfully, rarely needed), qualifications for partnership, organizational structure, etc