A few law firms have had the benefit of organic preparation for succession. Their natural tendencies led to grooming the next generation for the transition of client relationships and management responsibilities. A small percentage of firms have actually executed carefully prepared formal succession plans.
But, the overwhelming majority of law firms are not prepared for or even preparing for succession.
Admittedly, succession planning isn’t for everyone. If your law firm doesn’t have interest in long-term, multi-generational, viability then this post isn’t really for you. In fact, you would be far from alone, 70% of all law firms don’t make it beyond the first generation — some intentionally; but far too many by default.
The consequences associated with failing to prepare for succession range from severely limited options to firm closure.
As a matter of record the profession does not have a great track record when it comes to planning even for the near-term — much less, preparing a well thought out roadmap for dealing with critical issues or navigating transitional challenges. Surveys consistently indicate that a small percentage of law firms have anything that approximates a documented succession plan in place.
The only viable conclusion is that succession simply isn’t very important to many.
Too harsh? Think about it. Virtually everyone reading this post will readily agree that in life we rarely accomplish anything we did not set out to accomplish.
Transitioning a law firm from one generation to the next is no exception.
It is arguable that there was a time in the legal profession when a reputation for excellence, or long-standing institutional clients, or even the fabric of a partnership was enough to somehow ensure, or at least facilitate succession. But I would suggest that day is gone. Clients drive a different conversation. The marketplace is definitively different. And law firms face transitional challenges on what can seem like an almost daily basis — not the least of which is that the young lawyers in your firm have their own set of goals and aspirations.
(In fact, the young lawyers in your firm have been talking about your firm’s succession plan…and evaluating their career options based on what they see.)
If you’re really serious about building a firm that moves from the founders to successive generations, it is time for you to appropriately address how you hope to make that happen.
Planning for transition isn’t easy… But most lawyers I know love to tackle difficult problems. Deciding it is an issue that warrants focus is the most difficult part of the challenge.
Once you’ve decided to focus, an effective plan will tackle some significant questions. Among them, compensation, client control (or more accurately, relationship management — the client is the one in control), talent assessment, and the mentoring and cultivation of future leaders.
But not one of these issues is insurmountable…if succession is truly a priority.
For those that care about successful transition, the time to start the process is now, before it is too late.