Succession Plans

Succession Plans will be impacted throughout the next decade by the retirement of senior law firm partners and a bumper crop of associates seeking new or different work styles.

As Baby Boomer lawyers shift out — willingly or not — upcoming ranks will be expected to service clients conditioned to having high expectations for speed and results.

This is the same class of clients who, already aware of the hollowing out of legal talent, have been adding to their in-house departments. They will also be proactive in electing to send outbound work elsewhere and get it done by other means, if and when necessary.

‘No Surprises’ Succession Plans

The legal market, which has undergone explosive change over the last 20 years, is evolving and accelerating at a ferocious pace now primarily due to fallout from the pandemic. As a result, lawyers at all stages of their careers are reimagining how their working lives will unfold. Moreover, they are acting on it and loving the results.

How do I know? Because I am often the first call to help enable a smooth succession for clients as well as law firms and legal service providers, while also supporting individuals who are changing their career direction, or easing into a new lifestyle and opportunities.

Timing and Actions

Succession, as part of business strategy, is best planned in detail two to five years before scaling back or full-on retirement, and in conjunction with colleagues and, most importantly, key clients. It is also vital to share Succession Plans and have contingencies in case of a need for early or unanticipated execution.

For law firms and legal service providers with deep bench strength, there are various solutions and tactics up for consideration. The best are long-term: embedding, secondments (permanent and term), laddered client teams, and cross-service teams.

Embedding and Secondments

Law firms and legal service providers with sterling and institutional client rosters often subscribe to organic talent growth. As a result, they often invest in and protect blue-chip client relationships by permanently embedding one of their own “organically grown” lawyers as in-house counsel. In the long term, that lawyer may be elevated to general counsel or higher, which helps cement the client-firm/provider relationship.

As a term arrangement, a secondment enables deeper knowledge and solidification of trust between a firm/provider and a client, which affords continuous opportunities to embed or lend talent.

Clients love embedding and secondment arrangements, and handsomely reward law firms and legal service providers who engage with clients in this manner.

Cohort Laddering and Cross-Service Teams

Cohort laddering is another client team strategy that enables collaboration. This technique involves the pairing and continuous graduation of sets of cohort-colleagues often matched by seniority. Teaming law firm/provider talent with in-house colleagues in a laddered style provides natural steps to solidifying relationships while enabling better traction and talent retention, and smoothing the succession path.

Creation of a cross-service multidisciplinary team around key clients is often a graceful way of both enabling succession while transitioning a client from being a “Client of the Individual” to a “Client of the Firm.” This classic client retention strategy enables cross-servicing and growth of clients identified as key accounts while enabling an individual lawyer to experience a smooth succession and make the transition with dignity.

While embedding, secondments, cohort laddering, and cross-servicing are often more easily accomplished within law firms of large size and wide scope, firms and providers with shallower bench strength or that have fewer areas of practice or offerings can either scale these processes accordingly or combine with other law firms or legal service providers that offer complimentary services.

Even though this level of collaboration requires deep trust, crisp boundaries, clear communication, and constant management, it bolsters business and enables all ranks in all entities to rise through mutual expansion.

These types of collaborative combinations may also be effective as test cases or precursors to formal mergers and acquisitions. In turn and ironically, the upshot of a formal tie-up between groups of professionals such as these may trigger a rebalancing of a combined talent roster, which could result in succession planning for some individuals of the combined entity.

Coming to Terms with Succession

Lawyers in many jurisdictions are mandated by regulators to have contingency arrangements. Still, it behoves them, and their clients and colleagues to discuss Succession Plans openly.

One of the easiest ways is by conducting a client service interview. Having done this many times, clients and firms/providers have told me that with the aid of a neutral third party, Succession Plans can be more easily broached, discussed, and acted upon.

Strategic management of a client’s interests are paramount to the success of all concerned. Therefore, solutions, consensus, and most importantly, continuation can be gained with respect and grace while providing peace of mind for all parties.