A Forbes article entitled Law Firm Leadership Survey: Top Strategic Initiatives of 2017 shared some interesting information about the burning and not so burning issues for today’s law firm leaders. The information was assembled through the work of David J. Parnell (the author of the Forbes article) and noted legal consultant Patrick J. McKenna.
The two recently presented to a group of managing partners some of the industry’s most timely and topical issues and surveyed them for their feedback. The survey revealed the important and less important issues faced by many of the law firms that focus on management issues. The leaders surveyed were from firms between 100 and 1,000 lawyers in size so the impressions shared were from a broad spectrum of law firm profiles.
Important to the assembled leadership were issues related to strategic focus, succession planning, “management matrix,” and cultural identity. While all four of those identified issues are worthy of much discussion, the focus here will be on the issue of succession planning.
Respecting succession planning, the Forbes article noted that some leaders expressed concern that their succession issues were imminent, that leadership incumbency is a perceived problem, and that present law firm demographics are not conducive to effecting law firm succession.
The concerns expressed are not surprising but at least they come from firms that have done some succession planning. As has been observed here and elsewhere many times, far too many firms have done far less and have not adequately prepared for succession. If your firm is one, what are its options?
Start Planning. Even if a firm has been idle in preparing for succession, initiating a succession planning process is an excellent option. Not only does succession planning generally move a firm forward in preparing for organic succession, but it helps leadership understand the firm’s specific succession challenges so action can be taken. The planning process may also stimulate the firm to consider options other than the traditional organic succession model.
Find a Savior. If organically turning the firm and its clients over to the next generation is not feasible, the firm may want to consider merging its practice with a more generationally prepared firm. Moving the firm’s practice to another firm may be difficult for some firms and their partners to accept, but the other options may prove less palatable.
Slide to Mediocrity. Doing nothing to prepare for succession is not a good option. Unfortunately, too many firms go this route. If the next generation of leaders or business developers don’t exist, or are not ready, willing and able to take over, the future of the firm will, at the least, slide towards mediocrity. As bad as it may seem, in some cases the fate of mediocrity could compare favorably to firm collapse and failure.
Prepare for Closure. An objective analysis about succession may lead to the conclusion that the firm should close and wind-down. Making that tough decision early enough can help a firm wrap up its affairs responsibly and with the least amount of suffering by the greatest number of people. Closing a firm requires planning and execution but done can typically delivers a result far better than the alternative.
Be Grateful. In some cases, historically well-run firms have not planned for succession but have done all the right things that are needed for succession. Those firms have hired well, trained their attorneys well in lawyering and administrative roles, and have introduced clients across the generational strata of the firm. Firms that fit this profile are usually well positioned for succession. For these firms, their bright futures are the result of more than luck but can be traced to a past heavy investment in good management.
A firm that has not planned for succession but is progressing towards a succession event still has options. While it should not despair, it has no time to waste. If your firm is in that predicament, is it ready to think about its options?