Succession Planning

It has never been more important for law firms to plan for the future. A highly competitive market, an aging profession, the changing ambitions of younger generations, many of whom place greater importance on work-life balance than reaching top leadership levels, and a long-held reluctance to discuss retirement and succession, all combine to create what some are calling a succession crisis. It is time to face the issue head-on and start putting systems in place to ensure the long-term success and health of lawyers and their firms: succession planning is the answer to this. A successful succession encompasses two core elements: transitioning firm management to a new generation, and transferring client relationships. This title provides guidance not only on how these two transitions can be achieved effectively, from the perspectives of both individual partners and the firm, but also on the plethora of issues involved in preparing for the departure of retiring partners and transitioning in new leadership, including compensation, the role of diversity and inclusion and financial considerations. It also considers situations where more specific and specialised plans may be required, such as managing the succession of a rainmaker or a founding partner. A strong and effective succession plan ensures that clients are retained over the long-term, retiring partners leave optimistic and satisfied, future leaders are in place and prepared for their roles, and the firm continues to grow and flourish. The shift to a more remote work environment has also made the institutionalising of processes such as succession planning even more important. By providing a thorough understanding of its many elements, this title explains how effective succession planning can be implemented and ensure smooth leadership and client transitions, securing and enhancing the current and future success of partners and their firms.

Contenu

Executive summary vii About the authors xi Chapter 1: Creating and implementing a law firm succession plan 1 By Sandra J Boyer, president, Legus International What is a succession plan? 1 The importance of a succession plan 1 Elements of firm management transition 2 Elements of transitioning firm clients 6 Impediments 7 Additional considerations 8 Conclusion 10 Chapter 2: Succession planning considerations for the senior lawyer . . 11 By Hermann Knott, partner, KUNZ Lawyers Introduction 11 Types of succession 12 The importance of timing 12 Impact of the size of the firm 14 Preparing the next leaders 15 Conclusion and outlook 15 Chapter 3: Holding on to clients when senior partners retire 17 By Susan Saltonstall Duncan, president, RainMaking Oasis Introduction 17 Establish a uniform policy for retirement and succession 18 Identify clients potentially at risk and assess relationship breadth and depth 18 Gain better knowledge of clients 19 Talk to each client to gauge client satisfaction, loyalty, and any concerns 20 Carefully select client relationship successors 20 Put a client development and transition plan and process in place 22 Monitor progress to make sure the transition plan is working effectively 24 Client transition checklist 24 Chapter 4: Succession of rainmakers 27 By Jaap Bosman, founder, TGO Consulting Law firm royalty 27 Real rainmakers and fake rainmakers 28 Hostages and Stockholm Syndrome 29 Santa's little helpers 31 Retirement reluctance 32 Mitigations 33 Rainmaker succession, hands-on 34 Chapter 5: How to compensate retiring and retired equity partners 37 By August J Aquila, CEO, AQUILA Global Advisors, LLC Getting started 37 Key partnership agreement issues 38 Retiring partners 38 Creating options for retired partners 42 The successor partner 45 Make it happen 45 Chapter 6: Diversity considerations in succession planning: future-proofing law firms through diversity 47 By Pam Loch, managing director, Loch Associates Group Introduction 47 Issues facing businesses around lack of diversity 48 How can businesses address these issues? 49 Benefits to business and future-proofing in an increasingly diversity-led culture 52 Conclusion 53 Chapter 7: Financial aspects of succession planning: protection and retirement considerations 55 By Veronica Mann, chartered financial planner, Talis Financial Advisers Introduction 55 Communication and contracts 56 Financial planning for retirement 56 Death and incapacity of key players 59 Future liabilities 61 To summarize 61 Chapter 8: Succession planning for sole practitioners 63 By Shelley Dunstone, principal, Legal Circles Thinking of retiring? 63 Will someone want to buy your practice? 63 Options for selling your practice 64 What assets can you sell? 64 What is goodwill, and what is it worth? 65 Options available to a seller 67 How to maximize your prospects of selling your practice 69 Conclusion 70 Chapter 9: Why lawyers and law firms find it difficult to deal with retirement and succession: overcoming the obstacles 71 By Ronnie Fox, partner, Fox & Partners Five reasons 72 Five ideas 73 Five solutions 75 About Globe Law and Business 79