Two underlying factors contribute to this challenge. First, many firms still operate under the long held belief that partners exist solely to deliver legal services, not to run businesses. I often refer to this as the “Jekyll and Hyde” dilemma. We expect partners to excel as both legal advisors and business leaders, yet we rarely provide the preparation, training, or education needed to succeed in the latter role.
Most attorneys enter the profession with little or no business training. By the time they reach partnership, they are unprepared for the financial conversations and decision making responsibilities essential to leading a profitable practice. This is a developmental gap firms must address early in an attorney’s career.
The second factor is the compensation system, which shapes much of the behavior inside a law firm. How profitability connects to compensation directly influences accountability.
When profitability has no meaningful impact on partner earnings, the concept becomes abstract, something disconnected from growth, practice development, or the true success of a partner’s book of business.
Competition among partners can further complicate matters. Many will take on work simply to increase volume, not because the engagement is profitable. Striking the right balance is difficult. The pressure to grow and originate business is intense, making it challenging to decline work that does not meet profitability standards. Yet the ability to speak no - confidently and strategically, is fundamental to running any successful enterprise.
Attorneys who come from a business background tend to approach matters differently. They’re more flexible and more attuned to key levers such as staffing, budgeting, margins, and what level of discounting is feasible while preserving profit. For career lawyers without this foundation, that shift in mindset can be harder to achieve.
If the industry is genuinely committed to improving profitability, then profitability must be reflected in compensation. It does not need to be the only factor, but it must be a meaningful one. Embedding profitability into the review process, and making it part of an ongoing dialogue, is essential to building a culture of financial accountability and sustainable performance.
