A few weeks ago I wrote a blog post on ‘who owns the client?’ This post has lead to a lot of questions and discussions. There seems to be a clear divide between those who believe the client belongs to the firm and those who believe the relationship is with the partner. This week I will be looking into an issue that is very much related to client relationship: succession.
At some point every partner has to leave the partnership. Whether this through sheer high age, reaching the contractual retirement age or by leaving mid-term, every partner leaves at some point. In most cases the firm will want to continue the relationships with the clients after the partner has left. And also from the client’s perspective there should preferably be little or no interruption in relationship and services if a partner leaves.
Based on our experience the retirement of a law firm’s founder has a high probability of coming with lots of difficulties. Founders have built the firm and through their efforts the firm has become what it is today. Often their name is – part of – the name of the firm. Founders often consider the firm their personal property and may experience extreme difficulties in letting go.
In many cases founders have strong personalities and have gathered mentally weaker partners around them as equally strong minded personalities would have clashed. This unintendedly reinforces the founders idea that the firm will not be able to ‘survive’ without him (yes these are predominantly men). If none of the other partners is deemed good enough to manage the firm (unsupervised), the founder will want to stay. More often than not this eventually ends in a fight where ‘the children have to kill the parent’ (not literally) before they can move on.
Succession of a founder is a management issue
I think no founder intentionally wants things to end badly. It is best to plan succession 10 years in advance. It all starts by appointing capable partners who are able and prepared to stand up to the leader if needed. There is an inherent juxtaposition: on the one hand two strong headed personalities might clash, on the other hand the weak will never gain respect. The founder should at the age of 60 consciously move to a backseat as it comes to strategy and management.
Achieving the status of rainmaker is as high as one can get within a law firm. Rainmakers are seen as more important than practice group leaders or managing partners. Rainmakers are law firm nobility, they have a special status. No-one wants to upset them and their opinion weights in heavily as it comes to strategy and decisions. Knowing this it comes as no surprise that no rainmaker will want to lose this status.
Having an optimal and smooth succession in place as it comes to rainmakers is top priority for any law firm. Rainmakers attract a lot of work, have a great reputation in the market and are highly trusted by their clients. Firms certainly don’t want all this to get lost once the rainmaker leaves the firm.
Managing a successful succession of a rainmaker requires planning, clever psychology and time. Lot’s of time. It takes time for the successor(s) to prove they are worthy of the client’s trust. It takes time and planning to help the successor build a solid reputation in the market (BD can help with achieving rankings in the legal directories). It takes clever psychology to make the rainmaker open up his/her relationships and accept and introduce successors in matters and to clients.
Succession of a rainmaker is mainly psychology.
As with ‘the founders’ succession of rainmakers is mainly psychology. It is important to recognize that the fear of losing ones special status as ‘law firm nobility’ and become less and less relevant to end in oblivience, may prevent the partner to transfer his/her practice and successfully introduce the successor(s) to clients and relations. Depending on the profit distribution system also financial motives might be serious a hindrance for succession.
The lateral departure
The succession of a partner who suddenly leaves for an other firm is the most difficult to plan for. In general it will be the more successful partners leaving as they are in higher demand. The departing partner will also try to transfer his/her book of business to the next firm and might take all or most of his/her team when leaving. This will leave the old firm vulnerable.
It makes sense to plan for departures.
Actually the only way to mitigate averse effects of lateral partner movement is doing a permanent risk assessment. We regularly map for our clients the relationships their clients have and help them to actively broadening this relationship. This could be done through introducing other partners, encouraging associates to build parallel relationships with the client on their level, having the managing partner visit the client periodically or even having a good contact between secretaries or finance departments. Intertwining of IT systems is also an effective method. It is advisable to try and build multiple relationships in order to become less dependent on one person.
So to whom belongs the client?
The relationship between a client and a lawyer is peoples business. It is the individual who over many years is able to build trust. It is the individual who makes the relationship. Having said that, many law firms have built a quality reputation that complements or exceeds the reputation of the individual partner. Law firms have operational systems in place that enable the individual lawyer to deliver. Law firms do the talent recruitment and training that provides the partner with a great team. On this basis I would argue that law firms should work on building a firm-relationship with the client. A relationship that will continue to blossom even after the partner has left. Conscious and methodical succession planning has to be an important part of this.