Crafting a Mutually Beneficial Succession Plan for Retirees, Clients, and Law Firms

Succession PlanningCo-Authored by Ashley Hollingsworth

According to the 2015 Altman Weil Flash Survey, “Law Firms in Transition,” only 31 percent of firms have a formal succession plan in place. With Baby Boomers representing 95 percent of law firm leadership as of American Lawyer’s 2015 survey, retirement is a reality firms must face - and face now.

Some firms have chosen to enforce mandatory retirement ages, while others handle aging lawyers on a case-by-case basis. According to a 2016 American Lawyer survey, only 16 of the 68 firms that disclosed their retirement policies maintain an old-school mandatory age cutoff. For these firms, resistance to retirement among Baby Boomers has made it more likely that lawyers 65+ will make a lateral move - bringing loyal clients or younger lawyers with them - than embrace retirement.

Regardless of your firm’s approach, legal marketers should take proactive steps to smoothly transition client relationships, firm leadership, and industry knowledge to a younger generation.

Transfer knowledge, leadership, and visibility within your firm. According to Thomson Reuters, Generation X lawyers (born 1963-1978) are feeling a sense of urgency to address leadership gaps in their firms. The good news is that many firms already have the building blocks in place for sharing knowledge and transferring leadership through cross-marketing activities, such as internal “marketing breakfasts” or “lunch-and-learns.” With some thoughtful and deliberate tailoring, firms can capitalize on these existing strategies to prepare the next generation of leaders. For broader topics, such as a practice area generally, including the characteristics of the group’s target client, common types of matters and the like, all attorneys at various levels at the firm will likely benefit from participation. When it comes to taking a deeper dive into a particular client and how an attorney “does what they do,” a select small group of attorneys who will maintain the relationship once the aging attorney retires will work best.

Don’t just prep your firm; prep your clients. The American Bar Association requires that lawyers “tell” their clients with whom they have had significant personal contact when they are leaving a firm, preferably through a joint letter from the firm and departing attorney. As you work through the succession plan, remember to communicate with clients. An introduction to the retiring attorney’s successor (and client’s new point-of-contact) will be much more palatable when provided by the retiring attorney personally over a joint letter from the firm. Introduce successors through in-person meetings and shared workloads. Preparing the client for a change in small doses and while their senior relationship partner is still around and available to answer questions sets the stage for a smooth transition post-retirement.

Keep generational differences in mind throughout the process. While senior lawyers often have their own “heir apparent” to their books of business, generational marketing can help identify new connections for client relationships and leaders within the firm. Different generations have been found to have different communication styles, which should be taken into account when restructuring client teams or firm committees. Drastically changing communication or leadership styles can be jarring to clients and firm culture, so it is important to consider the audience when selecting a successor to a senior lawyer’s work or firm leadership roles. Who will earn the client’s respect, and who will get along with them on a personal level? Who will be able to effectively manage internal communications and maintain firm culture? Thoughtfully matching up a new relationship partner or small multigenerational team of attorneys can aid in client retention.

Invest human resources in legacy practices or prepare to do without. In some firms, senior lawyers maintain their own niche practice areas, have become the face of a practice area, or are extremely possessive of their client relationships. Unless this is practice the firm can do without, continue to invest fresh talent and promote mentorship within this area. This starts with the firm’s recruitment strategies, internal marketing, and cross-marketing activities. If a lawyer retires and the market perceives there is nobody to take his or her place, clients may take their work to a firm with a deeper bench. In a similar vein, younger lawyers who were mentored primarily by the departing lawyer may feel isolated without the senior lawyer and move to another firm. You do not want to lose an entire practice area due to one individual.

Start the conversation - and keep it going. Establish an age to discuss retirement plans and do not deviate. If you speak to some attorneys at 63 and others at 68, your lawyers could feel pressured to retire or unwelcome at the firm, which could lead to a lateral move to a more welcoming firm and lost business. Pick an age that allows ample time for the succession planning process. Transitioning client relationships and ensuring that all parties are comfortable with the changes takes time. Have an open conversation about where the lawyer sees him or herself in relation to retirement, and if he or she has any recommendations about transitioning clients. Your aging attorney knows his or her clients and practice better than anyone else at the firm and will be your best resource and instrumental part in shaping a tailored succession plan. Keep the lines of communication open and schedule regular check-ins to gain valuable feedback and create a sense of ownership for and continued buy-in from the retiring attorney throughout the process.

Celebrate your departing lawyers. Whether retirement is mandatory, done begrudgingly, triggered by health reasons, or eagerly anticipated by the retiree, give the retiring lawyer his or her due. As a demographic, Baby Boomers are fiercely loyal, often spending the majority of their careers at the same firm, and should be rightfully commended for their work. Whether it is a retirement party at the office, a summer associate scholarship in his or her name, or a monthly “lunch and learn” with the retired party, find a way to show your appreciation for years of excellent work. Celebrating the departing lawyer’s career can help maintain positive relationships with the firm, which may encourage client retention and reduce lateral moves in the future if the lawyer decides to re-enter the workforce.

When developing a succession plan, approach it strategically, but with sensitivity to the retiring attorney and client relationships. The process takes time; be proactive and start early. Be respectful and appreciative to your attorneys and communicative and transparent with your clients throughout. The ultimate goal of succession planning is to create a smooth transition for the retiring attorney while maintaining a positive relationship with the firm, empower the lawyers who are filling their shoes, and retain valued clients.

For more information on succession planning, you can read “The Lawyer’s Guide to Succession Planning: A Project Management Approach for Successful Law Firm Transitions and Exits,” published through the American Bar Association.

Ashley Hollingsworth, Marketing Communications Specialist at Miller & Chevalier, and Ashley Smith, Marketing Coordinator at Gordon Feinblatt LLC for the LMA Mid-Atlantic Region newsletter.

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