Posted by Robert Half Legal on Friday, November 14, 2014 - 00:00 | Follow me
Succession planning has increasingly become a strategic component of law firm management – and essential to future viability and success, Robert Half Legal Future Law Office research finds. According to an article in the Connecticut Law Tribune , members of the baby boomer generation account for the most senior-level positions in many law firms, generating an estimated 50 percent of fee originations and holding more than 30 percent of the partnership positions. Succession planning has become a key business imperative.
Arthur G. Greene, a legal consultant with more than 35 years’ experience as a practicing attorney, who advises small-to-midsized law firms on a range of business and legal practice management issues, points to succession planning as one of the focal areas of his work: “Increasingly, I find myself working with first generation firms that were founded in the 1970s and 1980s by individuals who are strong on entrepreneurial talents and business savvy,” Greene explains. “But they’re just now planning towards retirement and realizing that while they’ve recruited a team of high-performing legal professionals, they haven’t done a very good job of grooming any of their employees to assume a leadership role in the organization.”
Greene notes a call he received from an attorney in his late 70’s who wanted to retire but was still bringing in about 70 percent of his firm’s business. “You obviously don’t change those kinds of circumstances overnight,” he says. “You need to cultivate the management and business skills you want in the future leaders of the organization. It’s a strategic process that I find takes three to five years at least to be successful.”
He points to an important component that many succession plans ignore. “In particular with small or midsized firms, it’s essential to not only train and expose future successors to the business side of running the firm,” Greene emphasizes. “You need to consciously develop an exit plan and approximate timeline for those who will be retiring.”
Transitioning clients to the younger cadre of attorneys in a firm is an important part of the process, Greene notes. “I find that senior attorneys are often reluctant to give up control, which only serves to undermine the firm,” he says. “An effective succession plan needs to include specific rewards for lawyers in their last years of practice to encourage them to transition their work and long-standing clients to the next generation of leaders in the firm.”
7 Tips for Effective Succession Planning
- Identify the organization's long-term vision -- where is it headed?
- Consider staff diversity required for the organization five or more years out (not just gender and race but culture, experience and viewpoints).
- Identify the capabilities required to realize the organization's vision.
- Locate potential leaders to guide the organization to its vision.
- Evaluate the strengths and weaknesses of each individual as well as what capabilities and skills they need to develop.
- Implement mentoring and developmental plans for identified personnel.
- Monitor progress and provide feedback frequently. Revisit plans at least annually to determine if the organization's long-term plans or the individuals' interests have changed.
Does your firm have a succession plan in place? If you have advice to offer for identifying and training new leaders, please add a comment below.
For more law practice management strategies, see: “Law Firm Management: 5 Keys to Effective Succession Planning” or download our Future Law Office report.