Has your law firm made plans for the future?

Has your law firm made plans for the future?


Law firms, just like any other business, must make preparations to deal with the loss of key employees and the hiring of new ones. Peter Scott, principal of Peter Scott Consulting and former managing partner of Eversheds’ London and European offices, explains to Diana Bentley how practices should address succession planning and why it is important to ensure a firm’s longevity.

 

 

To what extent is succession planning recognised as an important subject in law firms? What interests are at stake?

Succession planning should be regarded as one of the most important issues for law firms. It involves the future wellbeing of a firm, including issues over a firm's future leadership, the prevention of loss of talent and client relationships, and the reconciling of the interests of older partners, younger partners, key staff, managing partners and clients. The key word is ‘planning’ because forward-planning is vital if effective succession planning strategies are to be put in place.

For sole practitioners the succession problems are even more acute, such as:

  • What should they do with their practice when they want to retire?
  • Can they persuade another firm to take over their practice?
  • Has the practice any value? (unlikely in most cases)
  • Will an acquirer firm become the successor practice or will the sole practitioner have to buy run off cover?

What are some of the reasons firms may have (or give) for not dealing with the issue?

Many firms, and in particular some older partners, just put their heads in the sand and hope the problem will go away. Reasons given for this are myriad and some of the most frequently heard reasons are:

  • it is just too difficult to deal with, or
  • 'Fred only has another five years to go so le

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