Succession Planning: A Difficult but Essential Topic to Tackle for Law Firm’s Ongoing Success Into the Future
Although difficult planning for what lies ahead in the law firm culture is of high importance. During the Thomson Reuters Legal Executive Institute's 25th Annual Marketing Partner Forum, among the topics of discussion will be law firm succession, and practice-group transitions. These topics will be discussed during a breakout session called: Mind the Gap: Mastering Partner Succession Planning & Practice Group Transitions. Heading the panel will be Holland & Hart’s Firm Chair, Elizabeth Sharrer who has agreed to share her perspectives on this topic with the National Law Review. During the session, she will discuss specific challenges faced by firms regarding law firm leadership succession.
Law Firm Succession Planning: Critically Important...but Complicated
Succession planning and practice group transitions in a law firm setting is a complicated topic to deal with in any firm. Sharrer notes how it is a multi-faceted issue firms have to approach delicately. She goes on to say: “It affects so many different things that you would not really think about--generational change and intergenerational equity, for example.”
The ever-changing legal industry, alongside the expectations and personal needs of members in any given firm, are also concepts which are wrapped into succession planning moving forward. Sharrer points out, “Demands of the market are so different--there is stiffer competition and those who are coming in behind have different expectations and wants from their careers.” These dramatic changes, after several decades of relative stability, can make for a difficult situation all around when it comes time to pass the torch.
Complicating things further, is that the decision to retire is not a dispassionate decision about leaving work. Sharrer says, “It is such an emotionally fraught decision--when to retire and how to do it. Firms need people to make those decisions in a more dispassionate way . . . and, we are humans, it doesn’t work that way.” There are emotional needs that must be considered. Sharrer points out, the fact that firms have to “Balance the emotional validation of its current lawyers, senior partners who built the firm while creating an environment for younger members moving up to be fairly-compensated, all while making them feel like they are part of the firm’s culture.” - It’s a very difficult, and ongoing, balancing act every law firm faces as partners come and go, and new lawyers make their way up the ladder to serve as the new “face of the firm.”
Sharrer notes how this topic wasn’t discussed for a long time in most firms. She goes onto note: “Failure to address is widespread; we all know it’s there, but you are talking to your friends, who are also your partners, which makes it a difficult conversation to have.” But with the wave of baby-boomer retirements nearing law firms must address these issues in planning for the future.
Succession Planning: Creating a Routine to keep the Conversation Going
So, how does a law firm bring up these difficult conversations? Sharrer has a few ideas of what might make it easier. She notes that making retirement conversations with lawyers and partners, should become routine in any firm. She says, “Routinize the process as much as possible--with individual variation, of course, but if there is a process that is widely known, then people expect that you are going to have a conversation, and you need to have a plan, sp it stops feeling like someone is being singled out.”
This is even more present when dealing with retirement on a personal level. For some people, it is a much more difficult decision than it is for others. By creating a routine-process, and engaging in constant conversation, it doesn’t seem like the conversation is coming up out of the blue. This makes for a seamless transition in the firm’s culture. Further, when succession planning is discussed in an ongoing manner, it makes it much simpler for firms to pinpoint individuals who are the right replacement for partners who are moving out and getting ready to retire.
Another step Sharrer shares, is that of making room in law firm leadership for the successors. She shares, “Our Management Committee is structured to represent the junior and middle- groups, and we work hard when we are filling any leadership role to look down the pipeline to see who we can get to do this. From there we figure out who will do a good job in this position, and who can become a part of the generation which will lead our firm moving forward.”
Succession Planning: Leave a Legacy
As Sharrer pointed out, a crucial component of successful transitions is to create a sense of gratitude for retiring-partners. Make them feel that their work is validated, and their time with the firm was highly-respected. Sharrer shares that framing the conversation in terms of “legacy,” can help in this validation-process. She says, we try to ask: ‘What is the legacy you are leaving behind?’ This helps the departing partners think of their transition as: ‘I’ve had my turn; it’s their turn now.’” Sharrer also notes how mentors feel that sense of accomplishment when they see individuals they’ve mentored succeed moving forward. She says, “A younger person that you care about comes into their own-there’s the feeling that I’m passing something on.” Tapping into the emotional satisfaction of handing down a legacy is one way to handle the emotional challenges some individuals may face at this juncture in their careers.
Succession Planning 101: Keep your Clients in the Loop
Client Relationship Management is a crucial piece of the puzzle if a firm wants to succeed in the future with the new lawyers moving to the top of the ladder. Sharrer says, “The client has concerns. Among these are questions like: “Is this person one who can lead my business?” Or, “Can I turn to these young partners to provide me sound-advice?” Further, clients wonder how long these new partners will stick around in today’s highly volatile workplace. Are the going to be around for a few months, years, or are these new partners going to stick around for the long-haul?
Client working relationships must be managed accordingly. Any client, with reason, has concerns over departing-partners with whom they have worked with for years leaving the firm. For any law firm to succeed, it is highly critical to reassure these clients that their business matters, and that the firm will carry on that “legacy,” the departing partners have created.
In many cases, clients will be resistant to new partners coming into the firm. They have built relationships with the departing partners which took years to build. You can understand why it is a difficult transition, and often a lengthy-process, in developing new relations. Sharrer says, “In some cases, this is a transition that takes time--definitely not overnight--it's a dialogue. Finding the right person to take over, and integrating people at all levels, is often something which can’t be done all that quickly.” It’s crucial to pay attention and listen to the client during this process. Sharrer describes it as “a constant vetting process,” with plenty of back and forth. Both the client and the firm will ask questions during this lengthy process including: “Who is the best fit, who fits with the type of work, then asking how is this working out, how is it going forward?”
While this is a difficult and sometimes emotional subject for people, Sharrer is adamant that it cannot be brushed aside. She says, “This is part of the arc of a career. It is a necessary piece, because anyone of us, could not be here tomorrow.” Firms need to know for continuity purposes what happens next.”
Elizabeth Sharrer looks forward to the having this discussion on Law Firm Succession Planning with attendees The Thomson Reuters Legal Executive Institute’s Marketing Partner Forum will be held at: Terranea Resort in Rancho Palos Verdes, CA January 24th to January 26th.
She will be joined on her panel by: