Law firm management is an increasingly complex and varied undertaking in today’s world: challenges abound, ranging from talent acquisition and retention to quality assurance, client satisfaction, practice development, culture stewardship, competition, fee pressures, strategic planning, crisis management, rapidly changing technology and the rise of alternative legal services providers, among others. Yet, the best-managed law firm can falter and put its survival at risk if it neglects or mishandles succession planning.
For a thoroughly informative compendium of the latest wisdom on succession planning, one need look no further than Succession Planning: Ensuring Smooth Transitions for Lawyers and their Firms. This volume, in a series of essays by a broad cross-section of experts on the subject, presents a comprehensive guide to the principles and philosophies undergirding sound succession planning, as well as a nuts-and-bolts instruction manual for getting the job done right.
Succession Planning tackles a variety of issues that arise in the life of the law firm, whether the firm in question is a full-service global entity or a sole practitioner. It addresses not only the retirement of senior lawyers, but also the transition of partners from management roles, client transition and even the importance of incorporating succession planning into hiring decisions.
The opening chapters of the book describe in detail the considerations that go into effective succession planning, starting with the development of young lawyers’ careers with an eye to growing future leaders of the firm, with an emphasis on understanding that this process is a continuing, evolving one. At the same time, lawyers in management and other senior positions should work with their partners to develop plans for transitioning back into full-time practice or toward retirement. This could include specific billable-hour commitments, as well as taking on mentorship and advisory roles within the firm. Just as important, a program to ensure smooth client transfer is an important tool for ensuring continuity and client comfort.
Other chapters delve into the question of compensating retiring and retired partners and also address specific formulae for arriving at equitable solutions. The importance of having clear procedures incorporated in the partnership agreement is stressed, but the authors point out it is also imperative that the retiring partner and the firm are not at odds at transition time. This requires clear understandings about compensation and other incentives to ensure co-operation by the retiring partner and client satisfaction post-succession.
A chapter of the book is devoted to the importance of diverse hiring practices, to ensure not merely a cultural transition for the law firm, but also to “future-proof” its business by sending an important message to clients and other stakeholders of the firm about a commitment to having a diverse leadership in the future. Ultimately, the author of the chapter argues, diversity is good for business, and succession planning that builds on the firm’s diversity initiatives will have long-range benefits for the enterprise.
Succession planning for sole practitioners involves a different calculus from that applicable to multi-lawyer firms. What are the assets of the firm? What is the value, if any, of goodwill? What are the steps needed to be taken to make the firm attractive to potential buyers? Considerations for selling the practice, including strategies to maximize the value of the enterprise along the way, are concisely elaborated in one of the chapters.
The authors also shed light on the problem of rainmakers and other strong contributors (and strong personalities) not inclined to think about retirement and succession planning or to share their practices with their colleagues. This is where clearly-established procedures and guidelines, as well as a firm culture that properly weighs individual partner interests against those of the firm as a whole, must come into play.
A sympathetic view of why lawyers find it difficult to consider retirement is set forth in the concluding chapter. Early education and lawyer training does not prepare the future practitioner for retirement; the practicing lawyer puts client matters before his or her own interests; and sometimes it is just hard to confront the fact of aging and the difficulty of keeping up with a rapidly-changing world. The author, a renowned expert on partnership law and succession planning, offers common-sense advice: plan ahead, create a path forward, and keep in mind that, in so many cases, “as one door closes, a new one opens.”
Succession Planning is a volume that belongs on the shelves not only of law firm leaders, but also of lawyers seeking to chart their careers in a thoughtful and deliberate manner. This book speaks eloquently to institutions about strategies for their long-term survival, and to individuals about facing the future with confidence.
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