When a Rainmaker Retires
Early preparation can help ensure uninterrupted service — and help you hold on to key clients when their main contact leaves.
At law firms that don’t have a mandatory retirement age — approximately half, according to Major, Lindsey & Africa — high-producing partners may choose to leave at 65, or 70, or virtually any other time. Not knowing when that will happen can be a problem.
Partners age 60 or older control at least a quarter of the total revenue at 63 percent of firms, according to the most recent Altman Weil Law Firms in Transition survey. They also sometimes control client relationships, serving as the central or sole point of contact.
Without any idea when a partner will retire, a firm may not have enough time to adequately identify and prepare a successor — putting it at risk of having clients follow the departing rainmaker out the door, according to Susan Saltonstall Duncan, President of legal management consulting firm RainMaking Oasis.
“Firms say, ‘I’ve got it under control; my clients are fine,’” Duncan says. “These days, clients are in the driver’s seat. Firms can’t just go about their business and assume the client will stay happy and stay with them.”
GETTING READY FOR RETIREMENT
To prevent impending retirements from having a negative impact, firms, according to Duncan, first need to identify the clients of partners who are in their 50s and 60s — and which ones the firm might be at risk of losing because it doesn’t have enough of a connection to them outside of the partner’s relationship.
“The next step is to pick an age — 60 or 55 — and have the managing partner or department chair talk to every partner [that age] about a long-term transition,” Duncan says. “Any new client who comes in [to those practice groups] gets assigned two partners: One has a primary relationship with the client, and the other is secondary.”
Discussing the firm’s succession plans internally and externally long before the official hand-off can help ensure clients are prepared.
If business and litigation firm Davis Wright Tremaine’s clients don’t directly ask, the 500-attorney firm tries to proactively bring the subject up, according to Managing Partner Jeff Gray.
“It’s not just a hand-off; it’s really about building practices and investing in people. At the end of the day, that’s what’s going to drive the success of a law firm.”
“We have a very open discussion about how the team is moving forward. We talk about individuals who have been working on client matters and try to increase their exposure to make sure clients feel that not only do we have the numbers to support the work, we have the right people who understand the client,” Gray says. “It’s in our interest as a law firm, and it’s also in the client’s interest to be working with a team that knows them.”
In addition to sharing future staffing plans, some firms have found several other steps can help ease the transition and increase the chance they’ll be able to hold on to important clients when a rainmaker retires.
PROVIDE PROFESSIONAL DEVELOPMENT TRAINING
Firms often focus too narrowly on appointing rainmakers to practice group head and executive committee positions, instead of fostering other firm members’ leadership capabilities, says Duncan.
“If you’re going to have a succession plan be successful, it’s really about identifying at the five- or eight-year mark who is going to be the next leader,” she says. “What opportunities are you giving people to develop skills now — not when they’re 55 and Jim Doe steps down after 30 years of running a practice group?”
Commercial law firm Becker & Poliakoff, where some firm members have been partners for 30 years, offers a leadership program for younger attorneys.
Firm members who apply and are selected to participate in a yearlong series of events focusing on the business of law, which involve visiting the 100-plus-attorney firm’s offices to meet with department heads, attending business conferences and presenting a project on bettering the firm to its management committee, according to Founding Shareholder Alan Becker, who served as Managing Shareholder until handing the role off to his successor six years ago.
“There were some people put in the program in the anticipation they would be very good future leaders, and it helped make them that; it helped teach us others were not going to be,” Becker says. “Several people who have been in that program became equity shareholders and are on the path to leadership.”
“We’re asking lawyers to identify client teams and invest in that relationship so we don’t have to deal with a situation where we’re triaging if an important lawyer decides to retire.”
GIVE PARTNERS A REASON TO PARTICIPATE
Persuading rainmakers to take time away from business development efforts and hourly billed work to mentor the next generation can be a challenge.
“I don’t see this group, as much as attorneys 30 years ago, supporting people coming up so firms can survive for the next 100 years,” Duncan says. “You see a lot of hoarding of work going on. Most firms have not really figured out how to develop a system that accommodates a reluctance to give up money and the reality that as you scale down, the firm is going to pay you less. But there are things firms can do to [get] partners to play in the sandbox.”
One firm she consulted with added a column to its regularly distributed partner performance report to track transitional efforts.
“The column said [things] such as, ‘This person has now transferred $2 million in client origination credit or management responsibilities to another partner,’” she says. “In some way, they were compensated for that, and every time you look at the report, you get recognition for doing something positive.”
Emphasizing one of the major benefits involved in winding down — a reduced schedule — may also be a compelling selling point for near-retirement partners.
As Founding Shareholder Reid Wilson — currently Chairman of 18-attorney commercial real estate firm Wilson Cribbs + Goren — gradually prepares to fully retire, the firm has taken some of the day-to-day management tasks off his plate. He now focuses on business origination and thought leadership, according to Managing Shareholder Anthony Marré.
“The reason 90 percent of law firms fail at the transition from first to second generation is because the lawyers at the top really don’t have an interest in doing what it takes to make that happen,” Marré says. “You need to make them feel like they’re getting fair compensation for the value the firm is getting, [such as] time, something that’s incredibly valuable to them.”
“The reality is, you have to plan for these things. Clients will take some comfort in the fact this is a long-term, staged transition, and not something that’s happening overnight.”
KEEP CLIENT NEEDS IN MIND
In some instances, the person the firm initially identifies as the best successor may not mirror the client’s expectations.
“People say, ‘We have a succession plan; Joe Smith is going to take over client relations when Bob retires in five years.’ But do we know if the client even likes Joe Smith?” Duncan says. “If not, you might want to find another partner who is good with relationship development, or hire a lateral attorney the client would be happy to work with.”
Bringing new attorneys on board may also be necessary if you don’t currently have a subject matter expert on hand.
Because the land use and zoning practice Wilson heads up at Wilson Cribbs + Goren is somewhat of a rarity in Houston — and a critical piece of the firm’s overall business, according to Marré — the firm hired two attorneys to handle the practice area once Wilson retires.
“You have to have those clients having real contact with the people who are succeeding Reid; they can’t be shadowing him — they have to be directly involved,” Marré says. “We’re also having them do a lot of speaking, writing white papers and getting published, transitioning from one thought leader to another. In the next five years, we’ll have a team at or near Reid’s level, in terms of reputation.”
FOSTER AN ONGOING RELATIONSHIP
To facilitate successors getting client contact, Davis Wright Tremaine asks attorneys to prepare a business plan, which is vetted through practice group leadership. This plan outlines the ways they plan to introduce new team members through events like CLE courses where junior lawyers have a speaking role. Instead of issuing mandates, Gray’s firm gives attorneys some flexibility in how those interactions will occur. Attorneys’ efforts are evaluated each year against their proposed plan.
“We’ve moved away from box-checking, where you’ve got to do five lunches; the goal tends to become, ‘I’ve got two more lunches to do this year to comply with this plan,’” Gray says. “We’re asking lawyers to identify client teams and invest in that relationship so we don’t have to deal with a situation where we’re triaging if an important lawyer decides to retire.”
“These days, clients are in the driver’s seat. Firms can’t just go about their business and assume the client will stay happy and stay with them.”
If, however, despite frequent interactions, clients consistently keep turning to the soon-to-retire partner for answers, Becker suggests adding more face time for new team members.
“When we were a small firm, everybody wanted to deal with [the founders], so we would bring one of the associates to sit in with us and make sure that person got to ask the client questions or give input so the client would get used to them, and wouldn’t just turn to us,” he says. “Don't wait until the very last minute to make the transition.”
EMBRACING A BIG-PICTURE VIEW
Although the exact timeframe will likely vary from firm to firm, starting the process earlier than you may think you need to can help prevent any disruption to client service.
Wilson, for example, is taking a decade to completely step away from his duties at the firm.
“If this was something we were doing two years before he was ready to hang up his hat, that would never work; it’s not enough time,” Marré says. “The reality is, you have to plan for these things. Clients will take some comfort in the fact this is a long-term, staged transition, and not something that’s happening overnight.”
Preparing to maintain client relationships in the wake of rainmaker retirements isn’t a new concern; the shift in age demographics in recent years, however, has meant some firms could potentially see a number of high-producing partners soon exit in rapid succession. More than a third of partners expect to retire within the next 10 years, according to Major, Lindsey & Africa.
As a result, some firms, including Davis Wright Tremaine, are adopting a different approach to client- and partner-related planning.
“We think we can address the issue by interacting with clients in a more seamless way to maintain good, strong relationships, and in how we operate over the course of a lawyer’s career,” Gray says. “It’s not just a hand-off; it’s really about building practices and investing in people. At the end of the day, that’s what’s going to drive the success of a law firm.”
About the Author
Erin Brereton is a legal industry marketing consultant and freelance writer who has covered the legal industry, finance, business and other topics for more than 50 legal and other publications.