How does your firm deal with underperforming associates? We are crazy busy but have a couple first-years on vacation, 50-100 hours per month, and thinking we are a "lifestyle" firm. I don't want to just fire them, at least not yet, but I want to see a change. How many second chances do you give? How many months under budget?
I’d stop managing them all uniformly. If one of the three is a lost cause, fire him or her and use it as a learning moment for the others’ customized improvement plan.
Not sure if this applies, but when I was a junior associate I had no idea how to bill hours and cut my own time because I was worried I might appear inefficient (now that I know better I realize I was actually just on track). I also wasn’t good about billing for legit billable tasks. If that has anything to do with it, might be worth a conversation on what types of tasks are ok to bill for and what are not.
It is appropriate to tell people when they are not working enough. I have told two underperforming associates that if they want to work less than the staff they need to find another job. I have done this in the first 1-2 months of employment. One associate picked it up and is one of our better performers. The other found another job. Win win.
To answer your question directly though, we would typically allow a year to 18 months of underperformance before firing someone. Biggest thing to me is demonstrated effort to do better. If no effort after a stern talking to, then I would start telling my other partners that I am concerned we may need to let them go.
Are they generating enough revenue to cover their expenses (including allocated overhead)?
Nope.
Just my thoughts...
An evaluation of their performance is in order. If there are clear billable expectations that they are aware of and not meeting, advise them that they appear to be headed short of the minimum expectations. Also point out that these are minimums, not targets. If they are not aware of minimums and/or target numbers, it is time to educate them. If they are aware, and have already been counselled, fire the least desirable of the three and meet with the other two, setting out that there is now more work to be done, and that as valued members of the team, they need to carry their share of the load going forward. That the have been underperforming a little, but that you have confidence in them. After 3 months, find a reward for the one who has made the greatest change - a plum assignment, or just a dinner at your club/favorite nice restaurant "on the boss".
I manage a small firm, so it is handled a bit different. The first 6 months there is little expectation, the next 6 months a ramping up to actual expectation by making the load heavier and offering less opportunities to simply "follow along". After a year, they are expected to meet very specific minimums, and targets.
What is the why behind it? Are they turning down work? Are partners not wanting to staff them on deals?
We have a couple like this too - and the why is typically they aren’t that great. One seems to be trainable, the other is probably a lost cause.
The why is a good question. One is new, trainable, and probably just hasn't figured it things out yet. The other two aren't turning down work, but what they accept they do slowly or not at all. In my view, they just prefer doing "fun stuff" to working like a dog.