Planning for the retirement or unexpected departure of attorneys at your firm can be a tough conversation that is often put off by firm leadership. Although succession planning discussions can be complicated and sometimes difficult, the topic is essential to the long-term health of the firm. The fact of the matter is that many firms are not prepared. Even if the firm is established and successful, it is not uncommon for them to have little to no preparation for the loss of a key member. While every situation is different, there are a few common reasons attorneys use for putting off retirement and, as a result, firms implementing a succession plan.
Why attorneys hesitate to discuss succession planning
Without working in the legal industry, it is hard to comprehend the amount of work and energy that goes into an average case. The nature of an attorney’s work makes an almost emotional connection to cases, clients, and firms nearly inevitable. These connections frequently expand into work in the community that gives the attorney a sense of purpose. One reason lawyers can be hesitant to retire is the professional identity they have created and sustained throughout their careers. They can spend a lifetime building relationships with clients and the firm, and they can be reluctant to give them up. At this point, the career they have built gives them purpose and confirmation that they are making a difference. Additionally, practicing law may take up most of their time, and other interests likely had to wait.
The fear of income loss can also cause reluctance. Some lawyers have made enough or have a sufficient pension to retire at 65 or earlier and not be concerned. Others worry about the ability to maintain their standard of living in retirement. It stands to reason that the later people retire, the more money they have saved, and the less they will need for retirement. Many attorneys push off succession planning because they don’t want to think about retirement in the first place. Often, by the time they realize retirement is the right choice, very little preparation has been done to install a successor.
Why firms sometimes avoid succession planning
When it comes to law firms and succession planning, it really comes down to finding the right time to approach the matter. The firm’s disposition on planning can tend to be one of avoidance, despite the knowledge that doing so proactively is the most advantageous way to go about it. The succession planning conversation might be avoided because of the loss of billable hours involved, as an effective plan is likely to take a considerable amount of time for managing partners.
Further, hearing conversations about succession planning may make senior partners feel that they are being forced to exit. If the conversation is not open, honest and respectful, these partners may even take offense if they feel others are suggesting they aren’t as competent as they once were. Many firms are fearful of these conversations causing rifts between existing partners before the succession process ever begins. This, adding on to the reluctance of the departing attorney, is often enough to hinder succession conversations.
Don’t wait to start developing a plan
The solution to all of this is clear. Developing an effective succession plan far in advance of when the firm needs it establishes guidelines to make the process as pain-free as possible and confirms the belief that firm success can be repeated and sustained from one generation to the next. To learn more about succession planning and making the process as easy as possible for all stakeholders, download our white paper: Law firm succession planning: Developing the next generation of leaders.