Law firm succession is a huge issue for many of today’s law firms. Not surprisingly, more firms than ever before are focusing on succession by adopting written succession plans that address leadership succession and client relationship transfer. Despite the importance of succession, many firms have no written plan and remain unprepared for transitioning leadership or
Law firm succession planning represents an important component to law firm longevity. The two forms of succession most often discussed-leadership and client relationship transfer-should be top of mind to any firm thinking about being an enduring institution. While leadership succession can be a significant challenge, creating an effective client relationship transfer strategy is among the most complicated things to achieve.
In client relationship transfer, it takes four different parties to make it work. First and foremost is the client without whom there can be no client relationship transfer. Surprisingly, too often the client’s thoughts and perspectives on relationship succession are not prioritized, at least to the degree desired by the client. If the client’s interests are neglected, there is little hope for a successful plan.
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.”
No sooner than closing out 2018 than do law firm leaders confront the next challenge-2019. Even firms not facing upheaval caused by attorney departures or declining client relationships will encounter other transitional events. The contest never ends.
Whether 2019 preparations are just getting started or already developed, some areas deserve a firm’s attention. Focusing on these select areas can deliver short-term and long-term benefits and aid in making a law firm stronger. As the New Year dawns, the five areas that should receive a firm’s focus are:
Succession and succession planning are hot topics in the legal profession. One statistic explains the focus on the topic – only about 30% of law firms make it beyond the first generation.
Why Do So Many Law Firms Fail?
Why do so few law firms make it to the second generation? Consider this progression…
Succession planning among firms, whether leadership succession or client relationship transition, is a mixed bag. Some firms have thought about it deeply…
As the calendar year comes to a close, there is a lot to do at most law firms. Activities like collecting bills, distributing profits and casting next year’s budget can occupy many a leadership team. The tasks at hand can be time consuming and all engrossing. Given the importance of these short-term issues, thinking about…
There are two primary succession challenges law firms face. Leadership succession is one and is a vitally important step to assure a firm’s longevity. A second kind of law firm succession involves the succession of client relationships as senior-lawyers wind-down or retire.
As hard as leadership succession can be, managing client relationship succession can be…
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…
At a growing number of law firms, the Boomer generation is reaching the age when retirement among the ranks has partners leaving in increasing numbers. Numerous industry focused writings have noted an array issues faced by law firms experiencing retirements.
As partners retire, financial ramifications can be felt. The monetary payout associated with the retirement…