Succession Planning Consulting for Law Firms
Succession planning is the one issue that many attorneys want to avoid, even though it is more critical than ever. Left to their own devices, some lawyer’s idea of succession planning is to work as long as they can and then let the chips fall where they may. We know this because we have discussed succession planning with hundreds of lawyers. Tempting as avoidance might be, it’s the wrong approach. And increasingly it’s an issue that can’t be avoided.
For many firms, succession planning has an inter-generational dynamic. It arises because of a perceived conflict of interest between different generations of law firm partners. Sometimes the older generation makes the issue a priority, as when the partnership agreement provides for a buyout period, and the founding partners are concerned that no one will be there to continue the firm and pay their buyout. At other firms where we have consulted, the push to address succession planning issue comes from younger partners who feel their efforts and rainmaking results aren’t being adequately recognized, and they want more certainty about how they will be able to have an influence on the firm’s future. And when firms represent institutional clients, we have seen an increasing tendency for clients to raise the issue; they want to make sure the firm will have the mix of lawyers to handle their future legal needs. Regardless of where the impetus comes from, it is clear succession planning issues arise more frequently than they did even five years ago.
Outstanding leaders pass the torch with fire blazing. Mediocre leaders pass a dimly lit torch making it difficult if not impossible to pick up again.
How We Work
Because discussions regarding succession planning often raise emotion and nuanced issues, our focus is to help law firm partners reach a consensus. Typically, this involves some combination of the following interactions:
- Meeting with a variety of partners individually;
- Facilitating meetings of partners;
- Collaborating with financial advisors and law firm accountants;
- Mediating disputes between various partners;
- Advising the partnership regarding a variety of issues including partner compensation and composition of the firm’s management team.
Each Firm is Unique
Each law firm situation is to some extent unique. But our overriding experience is that firms have more options regarding succession planning issues than many of the partners initially recognize. For example, too often the most senior partners begin the process that their alternatives are to continue on exactly as they have for decades or retire and do nothing (or do something else that they find unpalatable). It isn’t uncommon for senior lawyers to feel that the alternative to changing their role at the law firm is death. And more junior partners are convinced that senior partners will never agree to any meaningful changes in firm compensation or leadership. Our experience is that most law firms are willing to explore their options in a more rational way, if they feel that system for addressing succession planning issues is fair, rational, and discrete.