Best Practice Tips: Getting Partners to Discuss their Future Plans

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the firm administrator for a 25-attorney firm in Baltimore, Md. We have 14 partners, nine of whom are in their 60s. We have no succession or transition plans in place for senior partners. Every time I bring up the topic there is resistance to even discuss it. I would appreciate any help that you can provide.

A. A decade ago, only the more proactive, well-managed law firms had programs and provisions in place for senior partner succession and transition. A majority of firms simply had not addressed or even given serious thought to the eventual retirement and exit of their senior partners. However, in the last five years, I have seen a lot of interest in succession, transition, and exit planning. The avalanche of baby boomers reaching retirement age has fueled this interest. Firms from the largest to the smallest are getting proactive and actively addressing succession and transition of senior partners. Some are putting in place formal programs, while others are at least addressing succession and transition informally using ad hoc approaches.

A recent Altman Weil Transition Survey gives us a glimpse of what other law firms are doing. Here are a few highlights from their survey concerning responding law firms:

• 26.9 percent have formal succession planning programs in place
• 48.9 percent have informal ad hoc approaches to succession planning
• 18.4 percent are working on succession planning programs
• 5.8 percent are not doing anything with regard to succession planning

Many law firms are finding it challenging to get senior attorneys to talk about their retirement plans. In many cases, the families of senior attorneys are having the same challenges. Coming to terms with aging is a difficult topic. In the case of law firms, senior attorneys often don’t know their future plans themselves, need the income, or fear that others shareholders or partners will steal their clients. In some cases, the firm simply does not have a mechanism in place that mandates transition planning. Some firms are implementing mandatory retirement and others are putting in place financial incentives to transition clients. Client loss is the most significant concern.

Keep at it and don’t give up, but it may take a series of baby steps. Educate your partners on the risks of “doing nothing.” Provide them with articles and other resources, and keep the topic on the agenda.

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John W. Olmstead, MBA, Ph.D, CMC, (www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics and author of The Lawyers Guide to Succession Planning published by the ABA. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.