Succession planning: Top 10 tips for law firms
The single biggest challenge for law firms in the next 10 years is the retirement of the baby boomers
Succession planning is a crucial phase in the life of any successful business owner – and the lifespan of any enduring business – just as creating a business plan is vital at the outset of any serious enterprise.
In this three-part series on succession planning, experts in the field will demystify the process and provide expert guidance on issues ranging from financial advisement to legalities to taxation.
Succession planning isn’t a process to take lightly, but it need not be a source of anxiety and uncertainty, either. By familiarizing yourself with these professional services and learning what they do, you’ll realize you have allies in this often-overlooked phase of business.
The single biggest challenge for law firms in the next 10 years is the retirement of the baby boomers. These attorneys hold many of the senior leadership positions in our law firms and are often the biggest rainmakers.
Transitioning responsibility and planning for succession is critical to the survival of law firms that have a number of senior attorneys headed toward retirement.
Here are 10 tips to remember:
- Set up a succession plan at least five to 10 years prior to the retirement of key management and attorney rainmakers. Waiting until the senior attorneys are in their sixties is a mistake that will often lead to the demise of the law firm.
- Hire partners at different levels so that there are up and coming attorneys ready to take over responsibility for the firm.
- Provide proper management training in every aspect of the firm’s operations to up-and-coming attorneys. Attorneys need to be trained and mentored in the firm management so that they grow and eventually take over the roles of senior attorneys.
- Develop a plan to transition clients to younger attorneys. This will require attorneys to co-counsel cases. Make sure that senior attorneys are encouraged and incentivized to move cases to junior attorneys. Paying for referrals is a method of ensuring that work is passed down.
- Discourage senior attorneys from holding onto the reins until it’s too late to hand over responsibilities. Unless there is a gradual transition, it is likely that the firm will fail when the senior attorney dies or becomes disabled, leaving their heirs to handle the difficult task of closing the law firm.
- Do not expect younger attorneys to provide for the retirement income of semi-retired or retiring attorneys without providing significant benefits in return. The old days of senior attorneys receiving lifetime pensions are ending. Younger attorneys are highly mobile, and if the burden of supporting older attorneys who have failed to provide for their retirement becomes too much, the younger attorneys simply vote with their feet. Make sure that any compensation provides an incentive for younger attorneys to be invested in the legacy of the firm.
- Do not ignore the need to create incentives for the senior attorneys to pass on work to more junior attorneys. Failing to plan means that clients will go elsewhere. That will destroy options for senior attorneys to work in a reduced capacity. Create a compensation package that rewards rainmakers for passing on their clients.
- Create an estate plan, particularly for solo practitioners, to cover unexpected death or disability. It is devastating for both clients and staff to handle the death of a founding partner who has not left an adequate estate plan.
- Come to terms with aging and the need to let go and pass the torch. Getting older is inevitable, so embrace the change and enjoy watching younger attorneys grow and get excited about maintaining the firm in the future.
- Offer an emeritus status for partners who want to remain involved in the law firm. This permits senior attorneys to work without the same pressure as they carried in their earlier years. Some attorneys want to stay actively involved and have a lot to contribute. However, it is essential to make way for up-and-coming attorneys who will be expected to manage the firm in the future. To achieve this balance, senior equity shareholders need to start stepping back, and an emeritus role gives the flexibility needed for that purpose.
At Griffiths Law PC we have attorneys and partners at various levels. We have spent a great deal of time planning for the retirement of senior attorneys who want to travel and step back from working long hours. We are proud to have an outstanding succession plan that is designed to protect our future and that of our clients.
(This sponsored content is provided by Griffiths Law PC.)
Suzanne Griffiths is the President and Co-Founder of Griffiths Law PC. Super Lawyers listed Griffiths as one of the top 50 women and top 100 lawyers in 2017, 2018 and 2019. In Denver, 5280 magazine selected Griffiths as one of Denver’s Top Lawyers for 2016-2019. She is listed in Best Lawyers in America. She received the Outstanding Women in Business award in the large business category from the Denver Business
Journal in August 2016. She was voted a Lawyer of the Year by Law Week Colorado in 2016. Griffiths' unrivaled focus, creative case strategy and attention to detail make her a very highly sought after litigator in her the field of family law. Contact her at Suzanne@Griffithslawpc.com or 303-858-8090.