May 13, 2014
Law Firm Succession/Exit Strategy for Owner of a Six Attorney Insurance Defense Firm
Question:
I am the solo owner of a six attorney insurance defense firm in Phoenix. The other five attorneys are associates – most of whom have been with me three years or less and had limited experience prior to joining my firm. I am 47 and am looking to start to wind down within five years and be totally out of the practice in ten years when I am 57. I want to start thinking about my succession strategy early so I have time to execute it properly. I would appreciate your suggestions.
Response:
If you are like most small insurance defense firms you have a handful of insurance companies that sends you virtually all of your cases. I assume that you bring in all the business, hold the key to the client relationships, and guard those relationships carefully. This may be a double edged sword for you in that while controlling those relationships and using your associates as "worker bees" may keep them from getting close and stealing your clients this approach may also prevent you from developing suitable "bench strength" in the eyes of your clients that could constrain an internal succession/exit strategy down the road. Ask yourself this question – if you made a couple of deserving associates partners today and you left the firm next year would any of the clients stay? Often in situations similar to yours I am told – none. If this is the case you need to begin to hire the right associates – ones that actually want to become partners someday (not all do) and bulk up the team that you have. Otherwise, you may have to bring in lateral talent at the right time or merge with another firm.
Unlike many law firms we are working with you are starting to think about this early – so you have time.
Good luck
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John W. Olmstead, MBA, Ph.D, CMC
Posted at 05:43 PM in Succession/Exit Strategies
Tags: Defense, Exit, Firm, Insurance, Law, Strategy, Succession
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