Bill Fazio, the principal of Fazio Advisory and the former managing partner of both Herbert Geer and Minter Ellison doesn’t think the current generation of young lawyers want the traditional partnership structure.
He spoke to Australasian Lawyer
ahead of the second Managing Partners Forum for Boutique and Small Firms, which has been organised by Chilli IQ. Fazio will be one of the key speakers at the forum, being held from the 21-22 August in Adelaide.
“I think that Gen Y won’t accept that there is one answer and they will have to fit in with it. They are a little more assertive in terms of what they’re looking for, and I think they’ve thought harder about things like work-life balance,” he says.
Fazio says that to ask a young lawyer nowadays to make sacrifices early in their career so that they could reap the rewards of being made a partner later didn’t resonate well – especially considering Gen Y generally won’t stay with the same employer for a decade.
Instead, he says there could be merit in law firms looking at the business models of start-ups where ownership, and hence rewards, are more equitably shared with employees rather than concentrated among a few.
“I think firms are going to have to say, ‘well for these partners who want to put money in, we’ll give them a good return for their money’. Let’s not say just because you want to be a senior lawyer that you have to have everything and borrow money to come in.”
Until now, lawyers who have been extremely committed to high incomes have had to have equity, and only a very small proportion of law firms have challenged this model, Fazio says, adding that it’s like a restaurant saying that unless you want a nine-course degustation meal, you can’t eat there.
He want to see firms unbundling aspects of the partnership model and using innovative thinking that allow for different forms of equity buy-in.
“This may involve getting other sources of equity from investors, for example…Maybe someone like me will say, ‘I’m willing to risk it at my stage of life’, and not tie equity to 80 hours a week at work.”
Another perk of solving the partnership puzzle would mean more flexibility for young lawyers who want to take valuable career breaks or work part time for periods without risking all future prospects of seniority.
More and more over the past 10 years Fazio has seen lawyers start to say that making a certain amount of money isn’t worth it if the hours are too long or inflexible and stop them from having a life outside of their firm.
“The intensity of high level practice of law is extreme, and I think people are encouraged nowadays to think about their wellbeing a lot more.”
Although he believes the structured traditional partnership model is starting to change and will continue to do so, he says without big money motivation, law firms will continue to sweep it under the carpet “until they see other people doing it a better way”.
The main thing is to get away from the ‘one size fits all’ approach, says Fazio.
“It’s an incredibly resilient structure that’s existed for a long time, but I think the underpinnings of it are really stretched…what I think will broadly happen is that there will be change in response to a threat rather than an opportunity, and I think it’s already happening.”
He finishes with a quote from US actor and social commentator Will Rogers:
"Even if you're on the right track, you'll get run over if you just sit there."