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FRONTLINES

TRENDS REPORT

Passing the Baton: A Sound Approach to Leadership Transition

Some good news about succession planning is that there has been a growing recognition of its importance for law firm, practice group and office leaders. The less-than-good news, however, is that many firms seem to struggle with how to implement their leadership transitions smoothly.

There has clearly been progress in succession planning over the past decade, as noted in the previous issue’s Trends Report—although in a survey done by Robert Half Legal, only slightly more than half of the respondents stated that they have succession plans.

Many, if not most, firms elect or announce their new leaders just a month or so before the incumbent retires, or completes his or her term, usually at the end of the year. In other words, there seems to be little time set aside for an orderly and effective transition.

But back to good news—a few firms have taken a different approach that makes a lot more sense. They are electing or announcing the current leader’s successor a year or more before the new leader actually assumes the position.

It’s Akin to a Relay

Essentially, this year-or-more approach is comparable to passing the baton in a relay race. Here is the picture: The person who is to receive the baton next is on the track and begins running even as the first runner is approaching the exchange area. For a few seconds both racers are actually running in tandem, stride for stride, as the first runner hands the baton to the next. Then, once the exchange is successfully completed, the previous runner slows down and leaves the track, while the one who now has the baton takes off as fast as he or she can.

Now let’s look into the history of this “relay approach” in leadership transitions. Possibly the first firm to adopt it was Dickstein, Shapiro, Morin & Oshinsky, when in late 2001, then-managing partner Angelo Arcadipane announced he would be stepping down come December 31, 2003. Moreover, he had been preparing his successor, Michael Nannes, even before the announcement. Nannes, in fact, had already served seven years as the firm’s deputy managing partner. Subject to the approval of the rest of the partners, the executive committee then selected him as the next managing partner at the time of Arcadipane’s announcement. Arcadipane said at the time that he and his partners had previously talked extensively about what issues needed to be addressed and how to best make the transition.

And it’s an approach that began to spread in subsequent years. Fast-forward to fall 2006, for example. That’s when Cleveland-based Benesch, Friedlander, Coplan & Aronoff announced that associate managing partner Ira Kaplan had been elected to succeed James Hill as managing partner once Hill stepped down on December 31, 2007—meaning the exchange was set for more than a full year in advance.

The Pace Quickens

Looking closer to today, earlier this year two Philadelphia-based firms announced their new leaders well in advance of their assuming the position, which is to take place in July 2011. The firms are Ballard Spahr, where Mark Stewart will succeed Arthur Makadon, and Dechert, where current chair and chief executive officer Barton Winokur will be succeeded by Andrew Levander as chair and by G. Daniel O’Donnell as CEO.

However, it’s not just BigLaw firms like Dickstein Shapiro, Ballard and Dechert or MidLaw ones like Benesch that have taken this far-in-advance approach. The 31-lawyer Primmer Piper Eggleston & Cramer, based in Burlington, Vermont, began preparing for its leadership transition in 2008 when name partner Bill Piper announced to the firm’s executive committee that he wanted to step down so he could return to full-time practice.

But note this added element in their approach: Piper and the firm’s executive committee (which has since become the board of directors) recognized that there were two excellent candidates, Anne Cramer and Douglas Johnson, but that both had extremely large and important practices. So the committee decided last year, and announced within the firm, that Cramer would become chair and managing shareholder and Johnson would succeed her as firm president as of January this year.

What’s the reason for this growing trend in transition planning? It’s probably best summed up in these words from one outgoing firm leader: “The job [of managing partner or CEO] has become so big and complex, and the responsibility so great, that the successor needs considerable time to prepare to step in.” Note also that, in some cases, the leadership role is now being divided between two partners (such as the co-managing partners at Foley Hoag and at Schwabe, Williamson & Wyatt, discussed in the May/June 2010 installment of this column).

Fundamentally, relay teams realize that a smooth passing of the baton is essential if they are going to be successful. It looks like more and more law firms are learning this as well.

About the Author

Bob Denney , President of Robert Denney Associates, Inc., has been providing management and marketing counsel to law firms throughout North America for over 30 years.

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