Is the grass greener on the other side? Some small firm leaders envy perceived advantages enjoyed by bigger firms. Leadership at big firms likewise can be found yearning for simpler times when their firms were smaller and the issues seemed simpler. Regardless of size, all law firms must work hard to succeed, especially in a time of industry upheaval.
One area of challenge for small law firms, as cited in a recent survey in the Thomson Reuters piece entitled 2016 State of the U.S. Small Law Firm Study, is the looming issue of succession planning. Based on the Thomson Reuters survey, approximately 82% of the surveyed firms concerned about succession have not taken any steps towards creating a succession plan.
But succession planning is also a big issue for large law firms. Various reports and studies focused on the large law firm segment of the market indicate that many large law firms don’t have succession plans. Thus, the state of the data suggests that succession planning is not just a small firm issue but is an issue that universally is under addressed.
Some leaders at small law firms may feel overwhelmed with the challenge of creating a succession plan. They may assume, incorrectly, that large law firms are more capable at addressing succession because greater capital, resources, and personnel their larger brethren enjoy make their task easier. True, those things may help, but the most critical components for succession don’t necessarily depend on those things. In succession, size or resources do not matter as much as:
Making Succession a Priority on the Firm’s Agenda. The biggest impediments to developing a good succession plan are procrastination or treating it as a low priority. If that attitude exists, at best succession will be a matter of luck or happenstance. Conversely, having the resolve to address succession positions a law firm to tackle the difficult decisions that succession planning evokes. Step one to addressing succession planning is making it a firm priority.
Making the Succession Planning Inclusive. Succession is a collaborative exercise in which persons on the outside must be let inside the tent. Not only do many of them represent your firm’s future, but their views and perspectives will be critical to creating a plausible plan. An inclusive process may also inform leadership that the pool of potential successors is not equipped to secure the firm into the future. Should this be discovered, adjustments to the planning process and decision making will follow.
Dedicating the Time Needed. Succession planning is neither easy nor quick. It takes time, lots of give and take and sometimes, restarts. As the process evolves, training or the pursuit of future leaders may become a necessity. Succession planning is not a weekend retreat affair. It involves many people, a great deal of work and time. Done properly, years will be invested.
Establishing Milestones. While extolling a firm’s culture can set the right tone for what everyone wants to preserve, it doesn’t get the firm from point A to point B. Any succession planning should establish milestones, objectives and goals that can be managed to as the succession planning proceeds. If succession depends on addressing compensation, identifying a pool of successors, training or recruiting the next generation, targets and deadlines must be established. Without them, succession will be mushy and in the end, likely a failure.
Considering All Alternatives. Everyone’s ideal in succession is turning the firm over to the next generation possessing great leadership and business generation skills. That is a recipe for a legacy. Unfortunately, many times the necessary ingredients for an enduring firm can’t be found. When the essentials are missing and the future of the firm as a stand-alone entity is in doubt, alternatives may be needed. A firm prepared for succession will not despair, but will consider the alternatives and select the path that is best.
The difficult task of law firm succession planning can be simplified by doing basic things that every firm can do. None of these actions require the kind of resources commonly associated with large law firms. If your firm has not prepared its succession plan, won’t taking these five steps help?