Mapping the Future: How Succession Planning Secures Client Relationships and Strengthens Firm Continuity
Article By: Katy von Treskow
“Succession planning does not necessarily equal retirement; it’s a map to a new destination.” This statement by David Ernst provoked an engaging and thought-provoking conversation at the recent LMA West panel discussion, “Mastering the Art of Succession Planning” attended by affiliate consultant Katy von Treskow. The panel was moderated by Kevin Guidry with Verita Global and featured the following speakers: David Ernst from Ernst & Burnik; Sheenika Gandhi of Greenberg Glusker; Kelly Noonan from Stokes Lawrence, and Deb Ruffins with Perkins Coie.
The discussion centered around how important it is for firms to plan for succession, so it is normalized as a business best practice to plan for risk management, vulnerabilities and business continuity.
Firms suffer from apathy towards succession planning primarily because transitioning a practice to others takes time. The partner not only needs to teach their successor(s) how to do the work but also, they need to integrate them into the client relationship.
The extent to which a firm retains a departing partner’s clients often is directly proportional to the time and effort the partner devotes to a carefully curated transition plan.
If a partner exiting a firm devotes little time and effort to socializing a client to successors, a potential outcome is losing the work because the client feels like the firm is indifferent about retaining the relationship. Practically, if clients are not provided with capable, fully integrated replacements during succession planning, they may shift their business to another firm.
Kelly underscored that “the firms that partake in annual business planning exercises with a process for planned and unplanned exits will not only have stronger client relationships, but also foster better attorney retention.”
Clients have started asking firms and practice groups to disclose who is next in line to lead their service teams with disclosure requirements added to outside counsel guidelines as a condition of engagement and adding succession-related questions to RFPs.
As Sheenika said, “we have reached a tipping point in our industry” and need to be able to have “good faith conversations” to create a process and plan for retaining high-value client relationships. But, as Deb warned, “in a relationship-first" business, it is important to understand your partner’s mindset before devising and executing a plan.
In summary, smart law firms are getting out ahead of this trend, using partner retirements as an opportunity to strengthen and broaden client relationships within a conversation about future team leadership. In our first-hand experience advising firms on succession planning best practices, clients that are engaged in the planning strategy respond well to that and reward those firms with new matters. Having conducted many client feedback sessions, we know how to create a framework to help manage expectations and ensure a smooth transition to new practice teams. Conversely, we have coached numerous senior partners on how to construct a thoughtful succession plan, including training the next generation to inherit high-value client relationships.
To learn more about how we can help your firm prepare and plan for these moments, please reach out to us!