Planning for the next generation of leaders is fundamental to a law firm’s future success. Yet, evidence suggests that not enough firms are doing enough to prepare properly for leadership transition; less than 40% of firms have any form of succession plan; plans or discussions around succession tend to focus more on exit scenarios (death, illness, retirement) rather than entry strategies to Partnership (leadership development, criteria, financial contribution). To ensure the firm’s continuing commercial viability, law firm leaders should be investing more time and energy grooming their successors.
In recent months, I have had the opportunity to work with Senior Associates from a range of private practice firms to assess their readiness to transition into a leadership role. It has become clear that in spite of their senior status (Senior Associate or Solicitor), many are unprepared for the commercial realities of becoming a Partner, be that Salaried or Equity. My research suggests a number of possible reasons for this:
- Firms have no policy or strategy for developing the next generation of leaders;
- Criteria for Partnership (Equity or Salaried) are not clearly articulated;
- Associates do not appreciate the differences between Equity and Salaried Partner;
- Associates view Partnership as a promotion and pay-rise rather than a business proposition;
- Associates do not fully appreciate the risks or responsibilities of becoming a business owner;
- Barriers to Partnership exist sometimes caused by unconscious bias among Partners;
- Associates have little understanding of the business of law and of their law firm;
- Associates lack the maturity and mindset of a leader.
I have often spoken informally with many Partners who tell me they were ‘clueless’ and unprepared for the challenges of Partnership when they were first invited to take a seat around the table. With the prospect of the legal services industry becoming even more competitive and the challenges of running a law firm becoming increasingly complex, firms cannot afford to leave the issue of future leadership to chance. Firms should be doing all they can to lead and develop their firms and their people if they are to remain viable.
Consequently, in the interests of business continuity, it will pay law firm owners to plan on passing the baton effectively. However, in doing so, they should not assume that Partnership is the holy grail it once was and that Senior Associates will be beating a path to their door. Increasingly, private practice lawyers have broader career options that they once did and so the benefits of becoming a Partner (either Salaried or Equity) need to be sold. Business owners need to ensure that their firms are in good working order, well-structured and managed and with the prospect of a bright future ahead. They need to have a compelling answer to the question ‘why should I become a Partner in your firm?’.
All of these issues point to the need for firms to develop and implement a robust succession plan, one that accommodates not just to the needs to the outgoing Partners but also those of the incoming ones. It will provide certainty, eliminate risk and keep your insurers happy!