Succession planning at law firms – is your firm prepared for the future? If the answer is “No,” then it is part of the 60% of mid-sized law firms in the same boat.
Issues Law Firms Face in Succession Planning
As the wave of baby-boomers who entered the legal profession in the ‘70s and ‘80s nears retirement, succession planning has become a real issue at the majority of law firms. Most law firms, big and small, have practicing lawyers in their 60s and 70s – many of whom also bring in most of the firm’s business. These senior partners own the client relationships and provide mentorship for junior partners. Their departure can lead to loss of business and gaps in management.
Still, most law firms fail to institutionalize a proper succession planning framework for several reasons. Discussing retirement with senior partners is difficult.
The average age of a senior partner in America’s top 200 law firms is 52. About 3 percent of senior partners are 71 to 88 years old. Senior partners are often reluctant to retire because they have helped establish the firm. Everybody looks up to them because they’re the major rainmakers and sometimes even the founders of the firm. In addition to respect, they’re also earning hefty paychecks. It’s hard to let go.
Other partners find it awkward to bring up retirement with a colleague whose efforts have helped build the firm and develop their careers.
The Complications of Succession Planning
The second reason why law firms don’t plan for succession is that it’s not easy. Succession planning involves more than just partners. The whole firm and its clients are affected by the departure of a senior partner.
From the organization’s perspective, a firm losing a senior partner is at the risk of losing stability and continuity. Without succession planning, however, a law firm might lose some of the senior partner’s clients, contacts, goodwill, reputation, and knowledge when he or she retires.
From the client’s perspective, it’s critical to have service continuity, which depends upon commitment, service quality, and personal relationships. A succession plan must address the clients’ concerns by planning a timely transition from the retiring partner to the succeeding one.
Strategies for Succession Planning
To overcome these challenges and institutionalize succession planning, a law firm must balance the interests of the retiring partner, the clients, and the firm itself. Here are a few strategies that work.
Make Retirement a Part of Career Planning
Retirement should figure regularly during discussions, performance reviews, and counseling sessions within the firm. When the partners reach a certain seniority level, a transitioning program should become available to them. The program should include annual discussions about their short- and long-term plans including retirement, post-retirement goals and expectations, their practices, clients, and the transitioning of their knowledge and contacts to successors.
Identify and Groom Future Leaders
Most law firm senior partners are Baby Boomers planning to retire within the next decade or so. It can be a big blow when a firm loses several rainmakers and mentors within a short span of years. To prevent losing revenues, clients, and expertise, law firms should make transitioning a part of human resource management. Identify and groom future leaders so that they’re ready to assume the roles of the retiring partners as smoothly as possible.
Provide Individual Support to Retiring Partners
Senior partners may resist accepting help and support because they’re reminded that they’re nearing the end of their careers. But it becomes easier when they’ve been preparing for the inevitable for years. Personalized coaching and mentoring by outside professionals and the firm’s retired partners, peer group discussions, and access to a library of resources for making the transition less disturbing will help the process.
Have Continuing Post-Partnership Roles
Consider having permanent roles for retired partners, making them advisers, mentors, or ambassadors. Discuss with your partners and establish criteria for different roles. Post-partnership roles can allay their fear of idleness and provide valuable input from people who’ve ‘been there, done that!’
If your firm doesn’t currently have a succession plan in place, this is definitely something to put on the priority list. Spending some time planning now will help avoid serious issues in the future.