Jun 06, 2018
Law Firm Succession Planning – Getting the Conversation Started
Question:
Our firm is a seventeen attorney business law firm in Chicago. Our clients consists of mid-size companies and a few Fortune 500 companies. There are eight partners and nine associates in the firm. Four of the eight partners are in their early sixties and the other four partners are in their forties and fifties. The four senior partners are the founders of the firm. Consequently, we have not had to deal with succession of partners until now. While we realize that we need to be thinking about succession planning we have not made much headway. The senior partners are reluctant to discuss their retirement plans and timelines. We would appreciate your thoughts and suggestions.
Response:
Client transition, management transition, and talent replacement are the major succession planning issues for law firms. Such transitions take time, especially with clients such as yours, and law firms can not wait until a senior partner comes forward, announces his intentions, and gives his required notice. Law firms should begin having conversations with senior attorneys and begin transition planning five years prior to a partner’s actual retirement. Having these conversations can be difficult. Senior attorneys may not know their plans themselves and may not have even discussed this topic even with their family. In some cases there can be trust issues at the firm and in other situations the firm’s compensation system may be a barrier. Law firm management must force the issue by institutionalizing a transition program and requiring conversation and discussion at a certain age. Some firms have mandatory retirement and others have a five year phase-down requirement with a formal client and management, for those partners that have management roles, transition program. Personally, I prefer the phase-down requirement with an individual tailored transition plan over the phase-down period. I suggest that transition plans be tailored for each retiring partner and reflect partner, firm, and client perspectives. Use compensation to reward successful client transitions.
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John W. Olmstead, MBA, Ph.D, CMC
Posted at 10:17 AM in Succession/Exit Strategies
Tags: Dialog, Firm, Getting, Law, Planning, Started, Succession, the
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