By: Natalie Loeb, Gordon Loeb & David B. Sarnoff, Esq.
Succession planning in the corporate world is vital to the survival of the entity beyond the involvement of its founders – does your firm have a plan for future leadership? For companies that sell products, proprietary programs and services, succession of leadership typically doesn’t affect the quality of the product or service. However, law firms and other professional service companies can be greatly impacted by the death or departure of a highly skilled practitioner or rainmaker. Many law firms are created by individuals who either have an expertise in a specific practice area and/or have established relationships that produce revenues to sustain the ongoing operation of the firm. A significant challenge facing law firms of all sizes, is how to establish a stable business model that can survive and withstand changes in key personnel.
First, let’s start with the definition of “succession planning:”
“Identification and development of potential successors for key positions in an organization, through a systematic evaluation process and training. Unlike replacement planning (which grades an individual solely on the basis of his or her past performance) succession planning is largely predictive in judging an individual for a position he or she might never have been in.”
The goal of any succession plan should be to elevate the most qualified individuals who can maintain and improve the firm’s production, culture and leadership. Succession planning is not an easy undertaking and requires strong leadership, a supportive culture, humility, objectivity and the absence of outsized egos. Given the fact that many law firms are controlled by the individuals who produce the most revenue, or their closely associated allies, succession planning can present difficult challenges to initiating the planning process.
According to David Robert, a leading Organizational Development Professional who has substantial experience working with law firms, “Effective succession planning is guided by three factors: (1) What role(s) are you focusing on, (2) how will you objectively evaluate successor readiness, and (3) how will you engage and develop your successors prior to their transition into the new role?” In addressing the first question, the management of a law firm must identify the leadership positions of the firm that need to be staffed and sustained in order to successfully run the business of the firm. Succession planning does not only apply to the attorney side of the firm, it also applies to business services positions such as the firm’s COO and CHRO.
“Successor readiness,” is a key element to planning for the future. To properly evaluate an individual’s practical legal skills, leadership abilities and assess intangibles such as emotional intelligence (“EI”) requires an objective eye. Often, rivalries, firm politics and a toxic culture can derail the succession planning process. In many cases, firms will engage external consultants such as OD professionals and executive coaches to assist with the design and implementation of the planning process. These professionals are generally certified in personality, leadership and values assessments, to assist in designing and outlining the necessary training to prepare future leadership.
Once you have the right pieces in place to enact a plan, it is critical to have a fair process established to encourage participation from firm stakeholders. As the succession planning team identifies possible successors, they must agree on how to approach that individual about being considered for a leadership role and whether that person is interested in being considered for this future role. Assuming they are, the planning team should explain the purpose of the succession plan, what the firm’s process would be and the time frame in which it will be carried out. There should be complete transparency about the process so that there are no misunderstandings or unintended surprises during the process. This is not an easy undertaking, especially when multiple people are being considered for the position. Obviously, personal feelings, professional relationships, egos and competition impact the process.
It is likely that a law firm management team that initiates a succession planning program has a supportive firm culture. However, a crucial question that David Robert raises is, “How does a firm’s culture influence the likelihood of a successful succession planning process?” He continues, “for succession planning to ignite engagement and motivation across a firm, the process must be transparent, fair and objective. As soon as a partner bypasses the formal process and goes all in to advocate for a sacred cow, the process immediately loses credibility and could adversely impact engagement.”
Many law firms have stood the test of time and have existed and thrived for decades. However, there are law firms, including several that were once ranked in the AmLaw 200 that no longer exist because of significant lateral departures, planned retirements or turmoil that ultimately brought an end to the firm.
There are many factors that can contribute to the demise of a law firm. However, with a transparent, authentic and thoughtful succession planning process, a firm can harness significant buy-in from its stakeholders and rally support for the leaders that are selected to assume a higher-level role at an agreed upon time. The process also allows for the individuals up for consideration to receive high caliber coaching, training and development to be equipped for the challenge. The succession planning process positions new leaders to establish themselves and works to ensure the survival and vitality of the firm.
 Business Dictionary, www.businessdictionary.com
INFORMATION ON THE AUTHORS:
NATALIE LOEB is the Founder of Loeb Leadership and an Executive Coach. She can be contacted at email@example.com, 866-987-4111, or www.loebleadership.com.
GORDON LOEB is the COO of Loeb Leadership and an Executive Coach. He can be contacted at firstname.lastname@example.org, 866-987-4111, or www.loebleadership.com.
DAVID B. SARNOFF, ESQ., is the Director of Strategic Partnerships and an Executive Coach and a consultant to Loeb Leadership. He can be contacted at email@example.com, 866-987-4111, or www.loebleadership.com.