As discussed in my last post, Law Firm Succession Planning 2015: Leadership’s Hidden Challenge (Part One), the confluence of upbeat economic news with generational differences in the lawyer ranks presents a problem for law firm leaders not having an institutional succession plan. The issue is not just theoretical-Altman Weil’s 2015 Law Firms in Transition report warns that the many firms not having a succession plan (Altman Weil projects the percentage at more than 65% of firms surveyed) will feel the economic effects imminently. For law firms in this predicament, the task of adopting a plan can be difficult but not impossible.
Contemplating a future without a well-designed succession plan, or just thinking that its preparation can be deferred to later, amounts to playing high stakes poker with a lousy hand. But it does not have to be that way. Five steps can be followed that can fill the void. A firm facing the risk Altman Weil warns about must:
Pursue a Prompt Solution. Do not wait. Altman Weil’s report tells us what everyone knows; many law firm partners are resistant to change (Altman Weil concludes that resistance to change is “a persistent threat to law firm success”). Today, the general resistance is compounded by the good times enjoyed by many law firms. Despite the significant challenge involved in rolling out a succession plan in that kind of environment, today’s management must steel itself to the task and forge ahead. While other problems may receive management attention, leaders must be resolute and prioritize the formidable task of succession now rather than wait until later. Excuses or preferences should be cast aside-unyielding attention should be directed to development of a plan and seeing to its prompt implementation.
Communicate. In times of change or transition, clear and constant communication is vital. When the Boomer with the client relationships is approached, the firm’s objectives should be explained and he or she should be encouraged to become an architect of a plan that provides for succession. The Boomer’s nominee as successor should be solicited. Likewise, a discussion with the client is needed to learn its preference. Views about fears, concerns and benefits of all concerned should be exchanged. Reconcile divergent thoughts, and then refine a plan that reflects that the firm has listened.
Create a Plan That Harmonizes Individual Self-Interest with Institutional Longevity. Whether the succession plan is management focused or client retention focused, it must answer each participant’s bottom line question of “what is in it for me?” All players in the succession plan, especially in light of the generational interests at play, will wonder about the benefits to be gained from cooperation. The Boomer, whose practice or position in leadership needs to be transitioned, must feel that the plan is fair, benefits generous and future secure. Promises must be more than words-they much be backed by commitments that are tangible, evident and secure. Similarly, the successors need to see reason to invest in the plan, even though today’s attention to the plan may seem like it asks for too great a sacrifice. These potentially conflicting interests must be managed by leadership with the goal of furthering the interests of the firm.
Make it the Key Players’ Plan. For change of any magnitude to succeed at a law firm, partner “buy-in” is required. In the case of a client succession plan, it is critical that the Boomer aging partner and the selected successor be deeply committed to the plan and its success. Again, harmonizing the ideal of key player self-interest (what are the “must haves” for the aging partner and the selected successor?) with the firm’s long-term objective is essential to making the plan work. Management should strive to develop an appealing plan that is executed by the two key players without constant prodding from up on high. If the plan becomes the key players’ plan, it has a great chance of success.
Earn Trust Every Day. Like an anti-biotic, a succession plan won’t be effective if not followed to its prescribed end. And just as the key participants must be fully committed, so too should management. To show its commitment, management must daily reinforce its unyielding support for the plan and its participant’s. By doing so, management will earn the requisite trust that is essential to success. Failing to earn that trust, or taking it for granted, will create doubt that deprives the firm of its ultimate goal.
If your firm is without a succession plan, there is no time to waste in taking these five steps. Even so, are there other things to do that you think are equally important?