Business succession and generational transition are no longer just theoretical issues or problems to be deferred until sometime in the future. By our estimates, a majority of the law firms in the world - perhaps as many as 75% of them - are now or within the next ten years will be, confronting the need to pass leadership, management, and fee-producing responsibilities from the older generation of partners to the younger generation.
Moreover, they will be doing this for the first time.
These firms are past the point for succession planning. They need succession management.
As many of these firms are already discovering, succession in a law firm involves much more than redistributing the departing partner's files and filling an empty office. There are some subtle and very difficult issues that my colleagues and I have observed as otherwise well-managed firms deal with succession.
Interestingly - but not surprisingly - the law firms that have the most difficulty with transition issues and succession management are those with partnership agreements that are vague or even silent on the subject. (I use the term partnership agreements in a generic sense, to include shareholders agreements, operating agreements, and other corporate "constitutions.") This is why, for law firms with partners who are over age 50, one of the most important first steps toward successful succession planning and management is to review the firm's corporate documents to ensure that the policies and rules governing partner retirement are clear, support the long-term business and financial interests of all partners, and are consistent with the professional culture of the firm.
To read more about global trends in law firms, visit the Walker Clark Worldview Blog.