I have been thinking about the results from a recent survey conducted by the Zeughauser Group. Although the survey covered a variety of issues, the responses related to succession particularly struck me.
- When describing the top objectives for their firm, the most frequently stated objective was to “achieve long term stability.”
- When describing the biggest challenge facing their firm in the next 3-5 years, the biggest challenge stated was “transitioning leadership to the next generation”, closely followed by “transitioning client relationships to the next generation.”
- Finally, when asked about the biggest priority in the next 3-5 years the greatest priority was “building a more stable future.”
These responses aren’t particularly surprising when considered along with repeated survey reports indicating a minority of firms have developed any type of formal plan to transition leadership and/or client relationships to the next generation. (See here and here for some good discussion related to the lack of preparation industry wide.)
What now?
If you are a law firm leader, this reality does not surprise you. We regularly visit with managing partners and governing bodies that see the writing on the wall. With the exception of those who choose to bury their heads in the sand, most agree succession must be addressed. A comprehensive and workable succession plan is essential if a law firm hopes to survive beyond the current generation.
A 3-Step Path to Survival
Step 1– Start now. As simple as this may sound, it may be the single toughest part of developing a plan. The day-to-day demands of managing a practice make it difficult to step back and consider the future. This reality is one of the biggest reasons many firms find themselves in the current predicament — years of not having time to address relationship continuity and succession.
“To think too long about doing a thing often becomes its undoing” –Eva Young
Step 2– Engage your colleagues in a series of discussions intended to yield a plan for succession. Inclusion is essential to obtaining the buy-in necessary for a plan to succeed. Conversations with those impacted (clients as well as lawyers) that focus on long-term benefits, continuity of representation for clients, and the value of legacy are critical pieces of the puzzle. Some of these conversations may not be easy, but without them you are reverting to a strategy of hope.
Step 3– Execute and monitor the plan. Very few plans roll-out exactly as intended but the routine monitoring of performance to the plan provides a means of adjusting as necessary to achieve the objective. Succession is about the future–and any conversation about the future must be on-going. Inside a successful firm, a good plan must be able to evolve.
A successful succession plan doesn’t necessarily mean future leadership comes from within your firm. The plan may include the recruitment of new talent in the areas of leadership, and/or client generation and servicing. It may mean that the core of your firm survives as a part of a bigger organization. The real key is that the result your firm ends up with is the result you desire. Without effective planning the desired result is highly unlikely.
One additional note that many firms miss when it comes to the issue of succession planning—-Succession is likely on the mind of your clients. The issues of experience and continuity are likely being dealt with inside your client’s organization. A thoughtful collaboration between relationship partner, the client and firm leadership is an opportunity to demonstrate that level of client-centeredness all law firms proudly tout.
Our experience is that most firms wait too long and suffer the consequence of fewer or no options. Don’t let that happen to your firm!
See here for additional reading on this topic.