“A partnership,” noted Tom McCallum, a chartered business valuator, “is like a marriage and you don’t know [a person] until you start living with them.” [Yuri Arcurs / Dreamstime.com] Click here to see full sized version.

Smaller firms and sole practitioners know that when the going gets hectic, they usually have no one to turn to but themselves — unless they take on a partner.

The advantages of a new person with new expertise, new ideas and new energy are significant. But so are the downsides. Before bringing someone into the fold, lawyers are well advised to explore the family dynamics of their firm and the latest addition.

“Adding a partner can add value to the business. They will think like an owner; they are adding value as an owner,” said Paul Bates, a partner with the Toronto litigation boutique, Bates Barristers.

However, he added, “you need at least three years of working with people to assess their skills and experience. Then you start a dialogue.”

“A partnership,” noted Tom McCallum, a chartered business valuator in Whitby, Ont., “is like a marriage and you don’t know [a person] until you start living with them.”

Part of the discomfort, he added, may reflect your own preferences and way of doing business. “You need to ask if you’re comfortable sharing the decision-making, if you’re comfortable sharing accountability.”

Personality is also an issue, said Richard Carlson, a partner with Cuelenaere, Kendall, Katzman & Watson in Saskatoon. “When you’ve got a smaller-size firm, you’re more like a family. You need to get along. There is no management [level].”

Lawyers considering taking on a partner, he noted, need to look closely at how the prospective partner gets along with the other partners in the firm, if any, and with other staff. “People can bring in a lot of money but aren’t [a good fit]. You may have problems down the road.”

Those problems may extend beyond internal office squabbles. “Sometimes your reputation is sullied by the company you keep. Pick carefully,” said Andy Cutten, a partner with Halifax Global, a management consulting firm in Nova Scotia.

“Make sure that the values and ethics in partnering are the same as yours,” he added.

When they are, the advantages to partnering can be significant for lawyers in the firm and for the firm itself. The primary reason to expand the ownership role is to expand the business, said McCallum. “This could be someone with similar skills or complementary skills. You can grow the business or diversify the business.”

The emphasis, however, must be on more than the bottom line. “A common error is to look at billings only,” said Carlson.

It’s important to understand why growth is important to the firm, said Carlson. “If you just aim at growing for the sake of growth, that’s okay if you’ve decided that’s your goal. But you may only end up splitting more profit among more partners.

“You need to do an analysis,” he noted. “What work is coming in the door? Is there lots of it? Are really good lawyers available now? This is really a planning process.”

Indeed, said Bates, “you need a strategic plan.” That plan will highlight business approach and potential for growth. It will also reaffirm key values.

“As partners,” Bates stressed, “you share profit and you share risk.”

Not to mention workload. It’s one of the primary reasons smaller firms bring on a partner. If your firm does not have the critical mass needed to warrant hiring additional staff, a partner can help fill this role, said Cutten.

That person, he added, can also provide subject-matter expertise in practice areas that your firm currently does not have.

That resource can also support other partners in the firm in two ways. First, said McCallum, “you’d have a colleague you can call on. A second resource is valuable.”

Second, he noted, there are economies of scale. “Costs are reduced per person.”

There is also personal support, and reassurance, when a suitable partner joins the firm. “Your partner is the one you want to trust when you go to Italy for a month,” said Bates.

That trust comes back to two factors: their ability to run the business and their ability to lead the business. “Past experience is probably going to be repeated,” said Carlson. “[You need to ensure] their personality and their image is consistent with what you’re trying to project as a firm.”

One of the advantages of bringing on a partner is, in fact, enhanced perception of the firm in the marketplace. “It puts up the appearance of consequence,” said McCallum. “Some clients are reluctant to deal with sole practitioners; there’s no backup.

“By having a partner,” he added, “you reinforce the appearance of having a ‘firm.’ It’s a marketing [tool]. It gives you the ability to attract a larger and more sophisticated clientele.”

Of course, the current reality is atypical. Law firms and sole practitioners are weathering the repercussions of a recession. That economic landscape should make lawyers more careful before bringing on new partners. “There is no scramble for new partners,” said Carlson. “You may want to be a little more cautious and protect what you have until the recession is over.”

The reasons why you should bring on a partner — or not — do not really change because of a recession. But one thing may. “During a recession,” said McCallum, “there are more potential partners to choose from.”

The best time to bring on a new partner is when there is a true business need — and well before there is a dire need, said Cutten.

The flip side of that is equally true, he noted. “Do not bring on a partner when there is no volume or opportunity to make the relationship worthwhile, when you have little to offer in return and when there is no personal affinity.

“Don’t,” he cautioned, “partner with someone you don’t like even if they are the ‘best.’ ”