A recent ABA Journal article reported on the demise of a successful law firm that had been in business for 60 years. The story about Harding & Shultz of Lincoln, Nebraska noted comments from one of the senior partners whose departure from the firm allegedly contributed to its demise. Seems that the senior partner, still full of desire to work as he always had, left because the firm’s mandatory retirement policy gave him no choice but to leave and work elsewhere. His departure, as well of that of another senior partner, generated other departures, and the firm could not keep going.
Law firms close for many reasons, including because inadequate planning for succession leaves a firm unable to continue once its founders retire, die or simply move on. No doubt a lot of things contributed to Harding & Shultz’s closing, but the mandatory retirement policy may have sparked the fire that burned its house down. If so, there is a little irony in the Harding & Shultz end because its inability to manage succession was, at least in part, triggered by the mandatory retirement initiative that was probably originally designed to stimulate future succession. Typically, mandatory retirement marks an effort to institutionalize opportunity for the next generation so that succession is more likely. In the case of Harding & Shultz, however, it looks like all the planning for succession failed because the next generation did not or could not step forward. When a law firm’s plan for the next generation fails, what is the reason?
In most cases, failure gets traced to a lack of execution. With utmost deference to the poet Robert Burns, the best-laid plans of law firms (and men) are not a solution but merely a step towards a solution. A law firm with an eye to the future must not only plan for the future, but it must consistently work to build for the future. In his Consistency of Execution, David Brock argues that effective execution in sales has three elements: knowing the right thing to do to drive expected results; doing those things consistently, day after day; and, continually sharpening the execution. For a law firm wanting the next generation to take over, a similar focus means that law firms must:
Hire Talent With Long-Term Promise. Law firms seeking long-term sustainability hire the top talent they can find. Every associate hired or lateral added should possess skills, personality and drive that show leadership potential. Settling for less will dilute the premium prospects in a firm’s talent pool and will dummy-down its future. Hiring to this standard should be disciplined-every candidate should be viewed through this lens. While not every person hired will work out, settling for a lesser hiring standard reduces a firm’s long-term chance for success.
Develop the Talent Hired Day-in-Day-out. Even athletes with the best natural ability need to be coached and challenged to realize the All-Star dream. After a firm has hired its promising talent, it should not assume that he or she would develop in due course. Every day should be a day in which the talent pool is nurtured, stimulated and grown. Remember, a firm never knows which stars will disappoint it by leaving-so all must be trained with a daily dedication. Doing so provides greater protection against an inevitable attrition. No firm wants to be left with talent that no one else wants.
Reward the Talent While Continually Raising the Bar. Talented people leave if not rewarded. Rewards can take many forms: money, professional development, conferring responsibility and valuing institutional contributions. To have talent truly grow, rewards cannot be expected or a given. If they are, rewards have morphed into entitlements and the future is undermined. Constant challenge that raises the bar builds a reward system and culture that maximizes personal and professional development. Everybody wins and the prospect for effective succession is enhanced.
In preparing for succession, law firms can plan all day long. But all the planning in the world won’t do much good if no one is around to take over when the time comes. Effective succession is not just a question of planning, but it owes a lot to dedicated execution. How well is your firm executing on its succession plan?