Top 10 Tips for Successful Succession Planning
Steps to remember
What happens to your client base when a partner or senior solicitor leaves or retires? Client relationships aren’t forged overnight, they take years to cultivate, so simply recruiting someone new, with a one-month handover, isn’t going to work. Shortcut the process and mistakes will be made; it can cost the firm clients and impact on its bottom line. Carefully thought-through succession planning is essential. So how does a firm plan for a partner’s exit?
Peter Bird, Managing Director of the Drury Partnership, a legal head hunting firm that specialises in sourcing talent for rural firms, gives his tips on successful succession planning.
1) Think ahead - succession planning takes time; if you rush, mistakes will happen and that will affect your firm and its clients. Safeguard against this by starting the planning process at least five years before a partner is likely to retire.
2) Allow time to shadow - find a replacement for the exiting partner at least three years before that partner is wishing to step down - it will allow them to shadow the exiting partner, forge solid relationships with the partner's clients, and fully understand the case load and running of the firm.
3) Start from the top and work your way down - who will replace the exiting partner? A young solicitor who can be trained up? A senior solicitor ready for promotion? A new recruit? Work out what skills, expertise and character traits are needed, then start looking. But word of caution be mindful of individuals who have moved frequently and lack consistency on their CV’s.
4) Budget for buy outs - a partner may have anything from £2,000 to £200,000 (or more) tied up in the firm, so discuss how to buy out them out. Does your firm want the equity stake or should the new partner buy in?
5) Budget for hiring- there’s a lot to consider: how much will the new partner be paid during the three-year handover period? If the new partner’s an internal recruit, their old position will need to be filled. There’s the possibility of promoting a junior solicitor, but who will replace them? Explore the recruitment and training costs involved and incorporate them into future budgets.
6) Be open - clients and your firm’s staff will appreciate your openness.
7) Prepare a skills audit – seize the opportunity to explore the skills you want the new partner to have. Are the exiting partner’s areas of expertise going to be relevant in five years time, or is the market changing? Look at trends and make informed strategic decisions about what skills the firm really needs.
8) Find a cultural fit both personally and professionally - ensure the succeeding partner fits with the firm’s culture – if they arrive and start rocking the boat, staff will soon begin looking for jobs elsewhere.
9) Ask the right questions However Uncomfortable They Might Be - it will help you identify the qualities you need in your firm's new partner. Does the firm treat staff well, what impact does the hierarchical structure of your firm have, is it transparent about difficult topics, what are its strategic and financial objectives for the next 10 years? The more questions you ask, the closer you’ll get to creating a complete character spec.
10) Be open and honest – be prepared to talk about both pros and cons of the business to potential senior individuals. This will help ensure they are fully informed and therefore aware about the firm, their role and direction of the business.