To ensure the longevity and success of their firms for years to come, lawyers will need to do succession planning. As legal managers, you know these conversations can be a struggle, but one way to move the process along may be to include lateral hires as a way to bridge the transition.
“Laterals help keep the continuity of the firm,” says attorney Ross Albers, Chief Executive Officer of Albers & Associates. “They help with the transition. They are the day-to-day people on the ground making sure that the firm continues to operate like it did before the succession.”
While laterals may not have played a role in succession planning in the past, today it’s necessary that they’re involved.
“It used to be that a homegrown attorney would be groomed to take over the practice,” says Ryan Reiffert, a business, corporate and estate planning attorney at the Law Offices of Ryan Reiffert, PLLC. “Nowadays, it’s probably much more likely that a lateral (who writes one of the founders a check) will take it over.”
Since laterals are crucial in the transition, it’s important to involve them in it. Here are some of the ways you can make sure that laterals have their say and assist you as succession plan.
WHAT TO LOOK FOR
Law firms that are succession planning can think about involving laterals before they even start working at the firm. According to Jennifer Gillman, President of Gillman Strategic Group, when a law firm is recruiting a lateral, succession planning needs to be part of the conversation. For example, you could find out if the lateral has management expertise and leadership abilities that the current firm’s lawyers and employees will embrace. Also, determine if the lateral has a certain reputation that’s known in the marketplace.
“These qualities are especially important if the firm does not have anybody from its current roster to take over,” Gillman says. “On the client side, a lateral may have the requisite legal skills and personality to be the best person to take over legal work for a retiring partner.”
“On the client side, a lateral may have the requisite legal skills and personality to be the best person to take over legal work for a retiring partner.”
They also bring a fresh look at the overall functionality of the firm, which can prove to be quite valuable. Laterals don’t have tunnel vision from working at your firm, so they can give you some useful and honest insight into how your firm operates.
“Have them observe the functioning of the office and then ask them about what they noticed,” says Jonathan Cohen, an attorney and Cofounder at Cohen & Winters. “Leave room for their suggestions and recommendations from an outside/fresh perspective.”
Albers agrees and suggests having a conversation with your lateral hires to get their perspective on what’s working and what’s not. “Ask them if they have any ideas on how to improve the practice. They’ve probably had many ideas but either never felt comfortable telling anyone or were told ‘no.’ Laterals will tell you what’s really going on.”
GET ALL PARTIES TALKING
Retiring lawyers should be involved at every stage of succession planning. That’s why it’s critical to create dynamic and open communication between the laterals and retiring attorneys, says Cohen. “Keep expectations clear and stay open to any suggestions.”
Cohen adds that clients need to be informed of laterals’ arrival early as possible so that they are in the loop as well.
If you identify a lateral as the successor, then you need enough time to train them to take on all these new responsibilities. “If you are unable to do this, it is unlikely the transition will go without any hiccups,” says Todd Turoci, Founding Attorney of the Turoci Bankruptcy Firm. “But if you make sure you leave a reasonable amount of time to train the successor, the change will be much smoother.”
“Laterals help keep the continuity of the firm. They help with the transition. They are the day-to-day people on the ground making sure that the firm continues to operate like it did before the succession.”
You could involve the retiring lawyer by asking their opinion on who they think their successor should be. Turoci says ideally, the retiring attorney will assist their successor by training them and introducing them to key clients so that there is a prior relationship before transition.
If an attorney is reluctant to retire, you could set them up with a shadow lateral, says Cohen. “This may give them some excitement about sharing their hard-earned experience with a younger attorney and plant the seed of retirement.”
Then, it’s like a mentoring situation where the retiring lawyer could impart some wisdom and lessons learned. “Laterals should take advantage of the opportunity to learn from the retiring lawyers. They should consider the things they would like to emulate and the things they would maybe like to change,” says Cohen.
Above all, leave yourself time — it’s the one resource you can’t get more of. Bring laterals and retiring lawyers together long before you need the succession to actually occur. Albers says that succession plan conversations can take over a year or longer to become a reality and that sometimes, attorneys wait too long to begin thinking about their plan.
“I recommend having a three- to five-year timeline when it comes to your succession plan. If you want to retire in three to five years, then start finding a succession partner now,” says Albers.
MAKING THE TRANSITION EASIER FOR A HESITANT RETIRING LAWYER
Along with having the retiring lawyer talk with the lateral and train them on taking over, the firm has to keep in mind how tough it could be for them to leave.
“Most successful lawyers will have a hard time letting go,” says Colin McCarthy, a Principal at Lanak & Hanna. “They have spent years building a thriving law practice. The key is to communicate with them early and engage them in the process. A successful law firm is a team. It is not one person. If the retiring lawyer understands that the future success of the firm depends on an effective and smooth transition, they will come aboard, especially if they are included in the process.”
McCarthy suggests keeping the retiring lawyer involved even after they’ve retired. You might leave their name on the door, set aside an office for occasional use, create an ad hoc mentoring role, or think of something else for the retiring lawyer to do that keeps them partly connected to the firm post-retirement. “This will help ease the lawyer into retirement and ensure a smooth transition,” he says.
Of course, having a succession plan in general is crucial. As difficult of a conversation is, remind the retiring attorney that ensuring the firm continues to operate successfully is an important part of their legal legacy to their employees and clients.
“It is important to have a succession plan to ensure that not only will your clients be taken care of, but so will the other employees in your firm,” says Cohen. “It can give you peace of mind that the best person for the job will be taking your place.”