Succession Planning for Law Firms: It’s Never Too Early To Start

//Succession Planning for Law Firms: It’s Never Too Early To Start

Succession Planning for Law Firms: It’s Never Too Early To Start

For law firms, preparing for the retirement of a lawyer isn’t as easy as buying a goodbye watch and writing a quick speech; firms should consider designing and implementing a succession plan to be a key part of law firm management and retirement planning. Beyond the obvious issues of client retention and loss of legal expertise, failure to address succession planning can lead to cash flow issues if the departing partner was a rainmaker and management issues if the individual was involved in the management and direction of the firm. The result of these problems is that focus gets taken away from current client work and future client development.

With the baby-boomers approaching retirement age, many articles have been published which address how to prepare an effective succession plan. The Law Society of Upper Canada has also published a toolkit to help guide lawyers through this process.

As a legal recruiter, when I am dealing with clients who include succession planning as a motivator behind a hiring decision, these are the factors I recommend they consider:

Client Retention: Building a book of business and maintaining strong client relationships takes significant time and effort and the same care should be put into preserving these relationships during a transition. A lack of communication to clients about future plans for the firm can make clients nervous and cause them to explore other legal service providers. Introducing clients to the lawyer who will be taking over the day to day work or the relationship management gives clients comfort that their needs are being looked after and also gives them time to get comfortable with the lawyer who will be taking over their file.

Knowledge Transfer: If you are practicing in a niche area knowledge transfer is an essential part of succession planning and also a time-consuming one. If clients have been coming to you for a specialized service then the ability to continue delivering the same quality of service in a niche area will be crucial for client retention and future client development. This is where long-term mentorship and planning come into play as it can take years to fully develop a junior associate as an expert in a particular area of law.

Identifying a Successor: Another key consideration is whether you would like to look for a junior lawyer to train over a number of years or if your preference is for an established practitioner, perhaps with their own book of clients, to merge with your practice. When succession planning is a fundamental reason for a hiring decision, I encourage clients to look for candidates who have shown commitment to your practice area, who enjoy the client-facing aspects of a law practice and who have demonstrated an ability and desire to continue to build their own practice while slowly taking over your client base.

The American Bar Association published a great article that outlines five questions to ask about your firm’s succession readiness. As the article points out, it is easy to get caught up in the day to day of running a law firm; managing clients, developing business and actually practicing law, leaving succession planning on the backburner until it becomes an immediate issue that needs to be dealt with. There is also the possibility that the wind-down will not take place on the exact schedule you may be planning for; illness or disability can throw a wrench into the best laid plans and knowing how you plan to deal with departures five or ten years down the road will certainly help you manage these situations.

Succession planning has to be more than just trying to hire top talent out of law school; it should be a key part of a firm’s strategy on an ongoing basis. A lack of attention to succession planning can result in the loss of talent and clients and can also hurt your firm’s brand in the long term.

Carrie is the President and founder of The Heller Group. She specializes in the recruitment and placement of partners and senior lawyers into major law firms, as well as general counsel and senior counsel roles for national and multi-national corporations. In her spare time, Carrie enjoys travelling, yoga, trying out new recipes, and spending time with her husband and two young daughters.

Photo via Bigstockphoto.com

By |2017-05-17T15:23:04+00:00April 30th, 2015|Archives|Comments Off on Succession Planning for Law Firms: It’s Never Too Early To Start