Part 1 of our Special Report “Mission Impossible? Managing Performance within the Partner Group” giving our perspectives on the The ‘Partner Contribution and Reward Survey 2017’ by Performance Leader, Managing Partners’ Forum (MPF) and Internal Consulting Group

Is the definition of Partner: No more development required?

Straight away, the survey’s authors make an intriguing decision about how they will refer to the management of performance in Partner groups:

“We use the term ‘contribution management’ in this report due to the negative stigma associated with ‘performance management’ in many cultures”

‘Negative stigma’ is an interesting choice of phrase and hints at the strength of feeling held by many in the Partner group towards performance management. It also intimates the principal ambition of many Partners: ensuring they meet their contribution targets, usually billable hours or utilisation.

A ‘stigma’ is defined as: “a strong feeling of disapproval that most people in a society have about something, especially when this is unfair” and its synonyms include shame, disgrace and dishonour.

Why is performance management (or contribution management) held in such low regard by Partners?

In our view, it stems from one of the primary characteristics of Partner groups previously identified by Laura Empson: Extensive Individual Autonomy and the continued focus on short-term, financial, activity-driven targets.

Crucially, the low value placed on performance management also implies a low value on a Partner’s individual development because personal development plans are often a key output of any performance management conversation.

Above all, it could be inferred that once you make Partner, performance management – and any potential personal development – aren’t something you need to, or have time to worry about.

While many firms undertake training programmes for their managers and have their own variation of a Partner ‘academy’ for their future Partners, once individuals reach the level of Partner, future development appears sporadic at best.

Extensive Individual Autonomy

Partners in professional services firms need and expect autonomy. They expect to be able to make their own decisions about how to apply their knowledge and expertise and manage their client relationships.

Autonomy is exacerbated because, perhaps more than any other industry, professional services leaders hold considerable leverage over the firm. Why? Because “The core value-creating resources of a professional service firm – technical knowledge and client relationships – are often proprietary to specific professionals.”

The result of extensive individual autonomy is that Partners don’t like to, or expect to have their performance managed or challenged. It could also be suggested that those responsible for managing performance are reticent to undertake performance management conversations for fear that the Partner in question might take their proprietary client relationships elsewhere.

This is backed up by the report which suggests that rather than holding formal, structured reviews which might question Partners’ autonomy in some way, conversations usually take the form of impromptu catch ups or as the report describes them “fireside chats”.

Likewise, the report suggests that “while project-based feedback can provide Partners with ongoing, work-based feedback from peers, team members and even clients and fulfils the parallel goals of performance and process improvement only 6% of respondents agree that project reviews are ‘part of how we work’ and only 15% say they’re done ‘regularly’.”

Focus on short-term, financial, activity-driven targets

It would be unfair to suggest that it is simply an attitude problem that inhibits performance management and subsequent development activities. The firm’s performance metrics have a significant role to play.

Once you make Partner, in most firms, the only metrics that matter are your annual contribution targets.

We have previously written about the negative signals that an ongoing focus of performance management on short-term, financial metrics send to the firm’s clients and employees but there can also be little doubt on the impact these metrics have on a Partner’s motivation – and time – to undertake personal development.

This is backed up by the research that finds that rather than ongoing regular reviews, most firms only undertake annual formal reviews with an emphasis on the past – whether financial targets have been met – rather than future objectives.

As long as performance continues to be judged on activity-driven, financial metrics (utilisation/hours billed) and rewarded accordingly, Partners will have little time or inclination to undertake professional development activities and will prioritise short-term objectives over development activities that might not yield results until some time in the future.

In our own recent experience, we have often found it is becoming ever harder for Partners to justify taking the ‘non-chargeable’ time to attend a development programme, despite the long-term benefits for the firm.

Finally, as if to highlight the standing placed on performance management conversations in many Partner groups, the research suggests:

“The connection between contribution management and compensation is highly variable. Only 26% of respondents consider formal reviews substantially affect the pay result. That is a low result, even allowing for those firms that operate a pure lockstep.”

In other words, in nearly 3/4 of firms, performance reviews have little or no impact on Partner remuneration at all…

Perhaps the definition of Partner: “No more development required” is close to the truth after all?

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Read each part of our Special Report on Managing Performance within the Partner Group:

Part 1: The ‘Macro’ Perspective – We examine the current state of Partners’ attitudes towards performance management and its standing in the Partner group:

Read: Is the definition of Partner: No more development required?

Part 2: The ‘Micro’ Perspective – We examine the performance management activities that are currently undertaken within Partner groups:

Read: Underperformance all round? The performance management conversation in Partner groups

Part 3: Our five recommendations to significantly improve the management of performance within the Partner group:

Read: How to improve the management of performance within the Partner group