Every lawyer is familiar with the concept of succession planning, and some even do it for a living. Estate planning, corporate and other lawyers often help clients find ways to pass valuable assets onto the next generation. Why do lawyers neglect to plan for the same in their own practices?
Most practitioners would tell you how important it is to plan for the transition of your assets, whether those assets include a business, real estate, money or personal property. But many law firms fail to take their own advice on the same subject. Client relationships may be the most important asset a law firm has. Yet even loyal, long-standing clients can become casualties when firms fail to transition lawyer-client relationships from one generation to the next.
Let’s consider the issues and what tactics firms can implement to decrease difficulties in the succession process.
The Importance of Planning Client Transitions
Lest you think transitioning clients only serves the interests of the law firm, I can assure you that clients are also concerned about what will happen to the relationship when their lawyer leaves the firm. Quite often clients are thinking (or even worried) about the succession before the firm raises the issue. They see their lawyer getting older; they know their lawyer is sick; they see their lawyer winding down, or spending winters in Florida.
One client’s comment captures the general point of view. His primary contact at the firm, a senior partner, was known to be quite ill. This client’s major concern about his relationship with the firm wasn’t hard to guess: “What’s going to happen to me?”
Another law firm conducting a research study found out it had lost a client because it failed to adequately pass the torch. The former client, quite matter-of-factly, reported: “When [my primary contact] retired, no one from the firm followed up with me. Someone from [a competing firm] called and I went with them.”
If it makes so much sense, then why don’t firms do a better job of planning for the succession of their clients? There are several potential reasons.
- Compensation. In some firms, the senior lawyer will benefit much more from the client’s fee receipts if he or she continues to act as the primary contact (the originating or billing lawyer) rather than delegating the relationship.
- Ego. Some lawyers have a hard time coming to terms with the fact that they are winding down their practices. Others have difficulty letting go of their hard-earned client relationships and, consequently, their standing in the firm.
- Lack of confidence. In some cases, lawyers with good clients haven’t yet found a suitable replacement, that is, a colleague in whom they feel comfortable entrusting their important client relationships.
- Lack of awareness. For many lawyers, the need to transition clients is not even on their radar screens. They just do not think about this important issue.
Steps to Take When It’s Time to Pass the Torch
When a lawyer needs to transition his or her clients to others in the firm, here are thoughts about ways to make the process go smoothly.
- Start immediately. The primary lawyer needs to involve other lawyers in his or her clients’ affairs as soon as possible. Clients require time to develop trust and confidence in new lawyers.
- Make the other lawyers visible. The primary lawyer should ask the other lawyers to sit in on meetings and phone conferences—at no charge to the client if appropriate—so the client can get to know them and learn about their expertise and experience. These lawyers should be encouraged to build their own relationships with the client. They should personally sign the letters they write and call the client directly with updates on matters and the like.
- Shine a light on colleagues. The primary lawyer’s main job in the transition is to make the other lawyers look good and to build them up in the client’s mind. This can be done by giving credit when they do good work, deferring to them in meetings, talking about their good results for other clients, mentioning their important outside activities and so forth. If clients resist having another lawyer involved in their affairs, it’s often because the primary lawyer hasn’t done enough to create confidence in the new generation.
- Involve clients in the process. There should be a very candid conversation with each client about the succession plan—what the firm would like to do going forward, who will be in charge of the account, the time frame for phasing out the current primary lawyer and related issues. Then, once the plan goes into effect, there should be periodic meetings with the client to assess how things are going. Be direct and ask clients whether they have any concerns and whether they are satisfied with their new primary contact.
- Put the plan in writing. As with most marketing activities, what gets written down gets done. So put the details of the succession plan on paper, including all the steps that will be taken with the client, along with associated deadlines and responsibilities.
- Create a client team. Most clients like to know there is a team of people assigned to their account, people who understand their business and issues and provide continuity in the delivery of services. Having a team will also help avoid succession problems in the future. Doing this correctly involves:
- Creating a team of lawyers and (potentially) staff in all the areas required by the client
- Introducing the team to the client through meetings, organizational charts, directories and similar tools
- Meeting regularly as a team to discuss the client’s projects and other goings-on
- Undertaking steps to better understand the client’s business and industry, goals and challenges
Where the Spotlight Really Goes
In some instances, transitioning a given client to another lawyer can be very difficult. For example, many firms have one or more “superstar” lawyers—a renowned litigator, a compassionate counselor, a famous deal maker. A true superstar is almost irreplaceable. By recognizing the situation, however, the firm can better plan for future transitions by cultivating one or more lieutenants to take over the mantle.
In most cases, however, it is a simple lack of planning that contributes to a problem with client transitions. When a lawyer retires or leaves the practice, firms often fret about things like partnership shares and office space. What they should be focused on is the lifeblood of the future—client relationships.