In a recent article in The National Law Review about law firm succession planning, Sue Remley offered some great analysis. Ms. Remley’s Succession Planning: How to Hand Your Law Firm to the Next Generation makes the important point that succession planning at law firms is vitally important and should not be ignored. She goes on to identify some key issues that come into play in law firm succession planning.
One key issue she identified is whether a firm can get the founding partners to relinquish control and power. A second issue is the flip side of the same coin-can you persuade younger partners with leadership abilities to take on and focus on that role? Swirling around these two key issues are a couple others-communication and timing. Because installing new leadership can create the most dramatic change that a law firm can experience, communication about the change is very important. In addition to the need for communication, there is the ever-important objective of starting and executing on the succession plan in a timely manner.
Ms. Remley’s observations concerning law firm succession planning are excellent. For a smaller law firm, however, the identified issues may prove daunting and make succession planning an even tougher task. For that reason, smaller firms must be proactive about succession planning or they may struggle when the time comes. For smaller law firms, the task can be tougher because:
Competing to Stay Ahead Causes Time to Slip By. All law firms compete to be successful. For many smaller law firms, the management function often is filled by a practicing lawyer or lawyers whose obligations to clients reduce the time that can be spent managing. The dual responsibility of practice and management can be all consuming, leaving little time to think about succession planning in a thoughtful way. For the smaller firm that has little time to spare, the opportune time to plan succession can escape needed attention.
Leadership is More Likely to be of the Alpha Variety. Smaller law firms managed by founding partners are more connected to the entrepreneurial beginnings than larger firms. That tends to mean that the smaller firms’ leadership has been in control, likes being in control, and has had his or her way for a long time. Unlike the larger firm where compromise and inclusion is more common, smaller firms usually have no tradition of succession or delegation. With succession being the ultimate form of delegation, succession planning can be a foreign way of thinking.
The Next Generation Pool is Smaller and May Be More Transient. Smaller firms will have a small sample size for finding the next leader. From this limited pool, many firms are finding the candidates unready due to a generational lack of interest in pursuing a management role. Additionally, in light of the high degree of lateral movement by lawyers some “prospects” in the next generation pool may have a transient history and only have been at the firm for a short period of time. Drawing a successor from a pool that may be limited in these ways can be discouraging.
Mentoring on Management Plays Second Fiddle to Other Mentoring. To prepare for succession, mentoring the next generation in management skills is advisable. But due to a combination of a lack of time and the priority often given young lawyer practice and business development skills, law firm management training tends to trail in institutional attention.
The Next Generation May See No Benefit from Being in Management. Many firms have a reward system that focuses on work productivity and business generation. Do those things right and a lawyer tends to not only be duly compensated by may also maximize the power he wields. A young lawyer that brings these elements to the table also provides more security for his future. Incentives to encourage a future role in management are not nearly as compelling and this can be especially so at a smaller firm.
Ms. Remley’s article in The National Law Review addresses succession-planning fundamentals. Although her advice is not limited to medium to large firms, our experience has shown that smaller firms have a disadvantage of scale that can make succession planning a more difficult task. If your firm is a smaller one, will you be able to overcome these impediments and find a new leader from the next generation?