In this final post in our five-part series on succession planning, we address perhaps the most challenging aspect of the topic: managing and supporting individual senior partner transitions. In Pillar 1, Pillar 2, Pillar 3 and Pillar 4 we discussed various components of how firms can design and manage approaches to the many facets of succession and transition management: firmwide policies, revenue, compensation and finance, succession of client relationships, and leadership and knowledge. These aspects of the framework tend to receive the most attention when firms begin to address the fact that according to the Major, Lindsey & Africa 2018 Partner Compensation Survey, nearly 40% of law firm partners expect to retire over the next decade.
The most critical aspect of succession management, however, is understanding and empathetically approaching partners about their future plans and needs. Whether or not firms have a structured policy and framework in place, firm leaders still report that their most difficult task is discussing the future with partners that reach a certain age. Trying to force or demand that senior partners leave or transition usually is not productive and likely will cause resentment and tighter control.
Why is this such a difficult undertaking? Many of the difficulties reside in the fact that retirement and succession are deeply personal and have a strong emotional impact on individuals. Our post Succession Planning: The Problem and a Roadmap, included a number of the challenges and roadblocks:
- Having too much fun: Many partners genuinely love what they do and have no desire to do anything differently.
- Fear about loss of identity and self-worth: For many, going to the office every day and practicing law is all they have known and enjoyed. Devotion to clients and their firms often meant they didn’t have or take time to develop outside interests, hobbies and non-work relationships. Self-esteem and relationships are often work-centric.
- Financial concerns: Many have not engaged in financial planning and/or cannot afford to retire.
- Resentment: Many senior rainmakers feel that younger partners didn’t have to do the hard work of bringing in clients and now just want to inherit their clients without working at it and in many cases, having the skills or experience to manage the relationships.
- Disrespected and forgotten: Some partners feel their firms are “tossing them aside,” not valuing the significant contributions and sacrifices many have made to or for their firms.
- Deep relationships with clients: Many partners grew their practices decades earlier, helping their clients become successful. These client relationships are often long-standing and deeply personal, and in many cases cannot be transitioned easily or at all. A senior rainmaker and former managing partner at his firm told me that he and his oldest, best client had made a pact that when one retired, the other would retire and that would be the end of the relationship between the client and the firm.
- Maintaining control: Often a partner’s history with the firm, contribution to revenue, contacts and visibility in the community and in some cases continued role in leadership provides a level of power for those partners. This power is something partners often resist giving up control over.
- No bridge to life after retirement: Most senior partners have not given much thought to what they might do as an alternative to the full- or even part-time practice of law. Few have developed the deep and broad skills and social networks to get involved in alternative meaningful “work” and play, nor have they explored options that might exist.
- Fear about aging: While most of us can hope to enjoy longer and healthier life-spans than might have been possible decades ago, most people still worry about maintaining their physical health and mental acuity. These concerns are compounded by the points previously noted that many lawyers lack the social networks, fitness routines and intellectual connections that help people stay vibrant and find continued meaning as they age.
What Can Firm Management Do to Understand and Address these Challenges?
- Communicate, communicate, communicate. Usually at the core of building trust and good relationships are effective listening, empathy/the ability to understand another’s needs and perspectives and finding common ground. While leaders of firms often lament how difficult it is to raise the topic of their future plans with senior partners, direct, ongoing and respectful conversation will be required for both the partner and the firm to devise plans that are of mutual benefit. Lack of meaningful dialogue often leads to distrust, misunderstandings and resentment.
- Make transitions gradual. A former general counsel confided in me that one of the things that made his transition to retirement so effective was that he was able to scale down over a two-year period during which time he worked with his successor and gradually transferred his time and skills to an important external role for the state bar foundation. This enabled him to feel he was still valued and relevant and be able to more successfully transition his skills to active involvement in a not-for-pay job. He said many of his colleagues who retired from law firms suffered when their departures where more sudden — one day they felt relevant, the next day irrelevant.
- Treat every partner individually. While we do advocate firmwide policies such as beginning discussions with partners at a certain age, requiring annual business plans of all partners that at a certain age begin to incorporate relationship successors and expertise/knowledge transitions, the timing and conditions of each partner’s retirement transition must allow for flexibility and customization. No two partners will be exactly the same.
- Address compensation and incentives. For many partners, their worth has been measured in their comp and origination credit. “Entrepreneurial” firms (which often are described as eat-what-you-kill cultures where comp emphasis has been on what you bring in for the lifetime of the client) pose more difficulties in negotiating “fair” compensation during transitions. Some senior rainmakers continue to horde or hold onto client relationships as a way to leverage/control their own compensation. Firms need to design flexible options for compensating partners as they phase down and perhaps even after they retire, e.g., time-period for compensation for WIP and A/R, doubling up credit for both senior partner and identified successor during transition, compensation for new clients referred to firm, etc. Since many senior partners still generate significant revenue for their firms, it is important to reach a “fair” (which can be at odds with what a partner perceives his/her value to be) and reasonable compensation plan.
- Value, recognize and preserve senior partner talent and contribution. Firms need to articulate and treasure the skills and contributions individual senior partners have and continue to make to the firm, the profession and often their communities. This can be done through oral histories, spotlight profiles on your intranet and asking partners to play key roles in mentoring, professional development and external activities on behalf of the firm.
- Preserve stature and provide options. In addition to determining compensation arrangements, the firm will have to decide whether and within what parameters it encourages partners to continue a presence and even to practice after formal retirement. Conditions and options will include:
- Title (Senior Counsel? Of Counsel? Retired Partner? Special Counsel?)
- Office and any administrative support?
- Will the firm retain and pay for the lawyer’s bar license? Liability insurance?
7. Maintain connections. As with any lawyers who leave their firms, building a robust alumni program is an excellent way for firms and former lawyers to stay in touch and maintain a sense of loyalty and belonging to their firms. An alumni program for retired partners and former lawyers who went to other firms or in-house is a terrific way to help your lawyers stay connected and get social value and resource ideas from others at similar life stages. Retired lawyers should continue to receive firm announcements and be solicited for feedback and ideas. Some firms continue to invite retired partners to portions of their partners’ retreats and other social events.
8. Offer support and coaching. Few senior partners have grown up with the more recently prevalent practice of providing coaching for leaders and future rainmakers. Given how emotionally challenging and anxiety-provoking retirement and even the years leading up to it can be, firms should offer resources to partners for personal coaching and support. Such coaches can help design the partners’ plan for how to build a personal legacy, develop and oversee client transition plans, coach on successor relationships and mentoring, etc. Financial consultants can help develop sound financial plans.
Part of this support will identify ways, links and introductions for partners to continue to provide valuable time and resource within their firms or externally. Examples of initiatives and roles firms and retiring partners have provided and become involved in include:
- Corporate social responsibility
- Pro bono
- Professional development, training and CLE
- Business development/sales
- Special task forces/initiatives for firm and practice improvements
- Firm history
- Client interviews and feedback program
- Firm advisory board (one that also includes clients and other “infuentials”)
- Faculty at law school, college or high school (others have served as deans)
- Consulting and coaching
- Pro bono (often through bar foundations)
- Leaders and directors on boards of profit or non-profit organizations
- Volunteering in civic and community organizations and causes
- Hobbies, e.g., travel, gardening, photography, writing