The management of several generations in a partnership requires a great deal of time, consensus building, and compromises by all parties until all solutions are perceived as fair.

In a partnership, several generations will always coexist. If maintaining a balance between partners in these structures is a very delicate matter, adding the generational factor makes it even more so. And although we may tend to feel that the problem that affected our generation is more important, each generation has had its tensions with the others. Let’s look at three examples that show different generational points of view.

1. The strategic vision. In every decision made in a law firm there is always a tension between the individual interest and the interest of the collective. It is logical that when analyzing this difference of interests, the older ones tend to preserve and capitalize all the investment they made during their professional life, while the younger ones tend to think about new investments and business development avenues. Professional services firms have a “habit” of decapitalizing once a year. And investments in the firm are medium to long term, so generational views are very different. Moreover, as partnerships are temporary ownership systems in which the valuation of the firm as a company does not play a relevant role – in the future we will have to address this issue in much more depth in another article – all investments are perceived as a lower return for the older generations.
   
2. Power distribution and compensation. In professional services firms, the distribution of power is based on a combination of leadership and business-generating capacity. For this reason, generations with more years of experience accumulate more power (they have had more time), while younger people must wait patiently for their turn. Something similar happens with compensation schemes. Those that are structured taking into consideration the past trajectory and performance of the collective (lockstep) generate more tensions than those that are structured taking into account present and individual performance.
   
3. Expectations of work-life balance or integration. This may be one of the most complicated to resolve. Expectations are shaped by the economic environment in which each generation has grown up. Labels (as unfair as they are useful for talking about these issues) lump together homogenizing factors for each generation, and help us understand their expectations. As the economic environments have been different for each generation, it is very difficult to reconcile interests. And, in addition, each generation lives its “economic present” in a different way.

These three examples show the day-to-day decision-making in a law firm, and it doesn’t seem easy. But partnerships are a form of organization for this type of firm that has been around for many years, so they have somehow managed to get to the present.

All these tensions are reduced with specific modifications in the systems that regulate their coexistence. And no two organizations are alike. For this reason, the management of these tensions is a matter of prudential knowledge (as opposed to purely operational knowledge), where more than theories and rules, which also need to be put into practice, there is a customized application to each organization. The same problem affects differently a young partnership than an older one, a mature firm than a newly created one, a small firm than a large one, a national firm than an international one.

In short, if we want to avoid generational wars, we have to apply scientific knowledge and submit it to the rules of prudential knowledge, where experience in similar situations must be adapted to the specific situation of the firm, with a medium and long-term vision that looks after the interests of the institution rather than those of individuals -the institution must be above individuals-.

A great deal of time, consensus building, and concessions by all parties are necessary until all solutions are perceived as fair. And this is where the culture or ethos of the partnership plays a very important role. The more work has been done on the firm’s culture, the fewer tensions are generated in the processes.

Miguel Ángel Pérez de la Manga Falcón, partner at black.swan.