Recently, the National Law Review posted an article about the benefits and wisdom of law firm succession planning. In the article, the writers spoke about the concerns and considerations of succession planning in law firms. However, such concerns span across both the legal and business field. Here’s why…
Baby Boomers are Retiring in Large Numbers
Both businesses and law firms are seeing a large bulk of their managing partners reach retirement age. The NLR article notes that in approximately 63% of law firms, partners aged 60 and older control half (if not more) of the firms’ revenue. This trend is also prevalent amongst businesses established prior to the early 2000s. With Baby Boomers reaching retirement age, businesses and firms must prepare to transition financial control to upcoming management. Therefore, both firms and businesses should begin to develop plans for succession, identify potential leaders, and structure the development of talent.
Yet, succession planning does not need to be tedious, but does require proactivity. Generally, both firms and businesses handle complex matters that may seem to preclude partners and management from thinking of the possibilities of retirement. Yet, it’s important to develop a smooth transition from active work to retirement in order to ensure that those long hours in the office are preserved. There can also be some really simple and straightforward tax saving techniques incorporated if a business can identify potential future leaders early on. Here are two simple measures that businesses and firms can take to ensure prosperity.
1. Identify the key positions that must be filled when integral members retire. Keep an eye out for ambitious and upcoming junior members who may be suited for the task.
2. Incentivize more senior members to identify the tasks that must be completed before they retire. Don’t let your #1 closer retire without a plan of action, especially if you have a major deal still in the works.
So, there you have it! Two very simple ways to start your firm or business on the successful path to succession planning! Still have questions? Contact McNamara Law Firm PC, LLO for more information.
*This post was written by Dominique O'Connor as commentary to the National Law Review article entitled “Law Firm Succession Planning: The Future is Now so Make a Plan,” published February 5, 2017.