Making Succession Successful: A Possible Roadmap
In our first article, we discussed the challenges law firms face in confronting succession issues. In this article, we offer a succession planning outline for firms that are ready to take on the challenge.
WHAT IS A SUCCESSION PLAN?
A succession plan prepares the firm to fill vacancies created by departures, both those that are anticipated (e.g., because of retirement or term limits on leadership roles) and those that are unplanned (e.g., because of illness or the unexpected departure of a key individual). A comprehensive succession plan addresses two types of succession: (1) firm and practice leadership and (2) client relationships. In some firms, these two aspects necessarily intersect.
Many individuals who assume a leadership role outside of a succession plan will be “learning on the job” and, in practice, their development becomes more of a “crash course.” A succession plan aims to develop individuals for possible future roles preferably with an extended lead-time and, in the optimal case, will be perpetual in nature to ensure continuity and stability for the firm long-term.
A succession plan should focus not only on the legal side of the firm’s business but also on the senior administrative and finance roles, such as COO, CFO, HR, Marketing, and IT. Although the plan for administrative and finance roles and functions may be developed separately (and subsequent to the legal roles), the goal is the same… to have the right individuals sufficiently prepared in terms of experience and training such that they are ready when the time comes.
THREE ESSENTIAL STEPS TOWARD A LAW FIRM SUCCESSION PLAN
Succession planning is difficult and takes a significant commitment of management time and firm resources, but the benefits of having a thoughtful plan and successful execution far outweigh the challenges. With a comprehensive and well-executed plan, the firm will see:
increased client satisfaction and client retention;
the opportunity to promote and increase the diversity of partners responsible for key practices/client relationships;
improvement of the opportunities for, and therefore retention of, high-potential partners; and
improvement of the firm’s knowledge and expertise in managing succession issues proactively and on a timely basis.
Step One – Appoint a Succession Committee
The first step in developing a strategic succession plan is to consider the appointment of a succession committee (“Committee”). This should include several members of firm management and practice group leadership, the Head of HR and at least one Practice Development representative, or someone in a similar role. The Committee should be small enough to function as an effective working group and chaired by the CEO/Managing Partner (or her/his designee) to provide overall strategic focus and a consistent and holistic view of the firm’s goals and priorities.
The Committee’s priorities include:
(a) Identifying the objectives of the firm’s succession plan, who is accountable for its implementation and specific actions and deadlines.
(b) Identifying possible roadblocks. This includes analyzing whether the firm’s partner compensation system disincentivizes senior partners and administrators/finance heads from actively facilitating succession based on their perception that “keeping their numbers (metrics) up” is the only way to preserve their compensation.
(c) Addressing the cultural aspects (in addition to the financial aspects) and reinforcing the firm’s expectations if there is resistance (with possible downward compensation adjustments).
(d) Building consensus within the partnership as to the benefits of the succession plan for the firm as a whole.
(e) Prioritizing key succession needs (by reference to strategic goals and needs, urgency of timing, significance of client and/or revenue).
(f) Establishing a broad list of firm-specific partner competencies and success factors (e.g., personality traits, capabilities and personal style) most likely to address the needs of the relevant practice or clients.
(g) Compiling an initial list consisting of those partners who display the competencies and success factors that make them possible succession candidates. This initial group should include a wide spectrum of diversity and talent and, within reason, be as inclusive as practicable, taking into account resource limitations.
(h) Developing a shortlist of high-potential partners who are the strongest succession candidates for specific layers of the firm’s needs, together with the case for each one.
(i) In coordination with the CEO/Managing Partner, consulting with all partners in the vicinity of retirement to discuss the steps (if any) that they have taken to date and their thoughts regarding succession. The Committee should then facilitate a discussion with the CEO/Managing Partner and others to discuss the feedback and incorporate into the plan.
(j) Compiling (for discussion purposes) a series of leadership training/development options tailored to meet the succession/business objectives of the firm.
(k) Formulating a draft communications plan for rolling leadership training out to partners in a way that is least likely to cause disaffection for those partners not selected.
(l) Drafting and finalizing the succession plan that reflects feedback from the CEO/Managing Partner, practice group leaders, other key partners and members of the executive team.
(m) Executing the plan in coordination with the CEO/Managing Partner and her/his designees.
Step Two – Design and Deliver a Leadership Program
As the firm develops its succession plan, we recommend that it consider designing a firm-specific leadership program. Elements of the program might include:
desired content for relevant learning modules (exercises, homework focused on the competencies the firm wants to emphasize, etc.);
general group sessions as well as small break-out groups, with as many interactive exercises as possible.
use of psychometric assessments, e.g., to determine leadership and communication styles;
social activities to emphasize aspects of leadership behaviors that the firm views as critical, such as teamwork, collaboration, decisiveness, willingness to listen and openness to change;
personal coaching preferably from a combination of experienced internal coaches together with outside professionals who bring an element of objectivity to the coaching experience;
tailored follow-up for each participant, focused on areas where there is room for improvement. To ensure that follow-up occurs, a personal coach could be assigned to work with the individual in between the working sessions over the course of the program; and
assessment of participant feedback for possible enhancements for future programs.
Step 3-Execution and Follow-Up
The key component required for success will be ongoing engagement and accountability. Therefore, the Committee should identify steps necessary to measure progress (and to monitor the leadership program) and evaluate results. This should include:
ongoing follow-up by the Committee with each group;
the tracking of development and growth;
an analysis of how individuals who have undertaken training have done in their new roles; and
a review of whether any modifications to the succession plan (which is a living document) or core leadership program are necessary to take into account changes in the firm.
Using this data, the Committee should report at least annually to the firm’s CEO/Managing Partner summarizing progress and impact of the plan.
Conclusion
Although the outline provided above should help focus the tasks at hand for firms who decide to confront succession issues, to be successful, a combination of skills and experience, together with accountability, are needed. In particular, firms need to show a real commitment of time, effort and resources (including assistance from an outside consultant, such as Volta, where appropriate) and not take a “check the boxes” approach. Success, in this case, should be measurable, and will only come with a process and plan that is bespoke, and not an “off the shelf” solution.
In practice, the roadmap for any firm will be different based on the firm’s culture, its succession needs, the level of management commitment, resources available, the degree of relevant partner support and acceptance. However, in the absence of an existing process, this outline can, at the very least, provide discussion points for those tasked with securing the future of the firm. Such a discussion, by itself, is a step in the right direction.
