Now, in addition to acting as an accredited museum docent at the Philadelphia Museum of Art (where he also serves on several curatorial committees and acts as guide coordinator for major exhibitions), Pagliaro is a frequent invited guest speaker and lecturer on art history at several universities in the Philadelphia area and southwest Florida, where he resides in winter.

Not surprisingly given his past position, he has strong opinions on how lawyer succession should be handled, and how clients should be brought into the situation.

鈥淭he great mistake most firms make is not maintaining a firm culture that institutionalizes client relationships and not making institutionalizing clients a core value of the partnership,鈥� Pagliaro says, adding that in most law firms, partners with clients benefit from referring to clients as my client and using ownership language and practices to insure they control the relationship, which is all the better to drive compensation their way and to resist pressure to retire when the appropriate time comes.

鈥淭hat is often not in the interests of the client or the firm,鈥� Pagliaro explains. 鈥淢any firms are content to let the primary relationship go on largely unsupervised, as long as the client relationship partner generates income.鈥�

A culture of institutionalizing client relationships

One way to instill a true culture of institutionalizing client relationships, he says, is for the firm to create a new role 鈥� Managing Partner for Client Relations (MPCR) 鈥� and ensure the professional in that role also sits on the firm鈥檚 compensation committee. The person in this new role should be charged with meeting with clients, eliciting honest feedback independently, and then exploring the full scope of each client鈥檚 needs. The MPCR should have as their main charge the job of supervising the cross-selling of the client to a broad spectrum of partners within the firm and creating client service teams, while acting as the team coach.

Importantly, it would also be their job to inspire all partners to understand that it is in every partners鈥� interest to expand client relationships as much as possible 鈥� even if there is a lead partner in the relationship.

鈥淭hat process needs to be transparent and supported in the compensation process,鈥� Pagliaro explains, adding that once an MPCR enters the mix, it opens the door for that individual to i) seek client feedback; ii) gather input from the client on succession; and iii) effectuate the transition of work and relationships.

Indeed, it is a culture that most firms say they want but struggle to achieve. That may be largely because firms lack discipline and follow through, and refuse to invest resources in creating infrastructure, empowering personnel, and providing support to drive true institutionalization of firm clients. Most critically, firms that are serious about creating such a culture need to back that up with a firm compensation process that reinforces the right outcomes.

Best practice for firm leaders is not to wait too long to address partner succession. A clear policy on when partners should begin to start planning for succession, which is fairly applied and religiously followed is crucial and should have the MPCR meeting with partners in the retirement zone at least three years before actual retirement. That way, this time can be used to manage the relationship, solicit input from the client, and introduce the client to more talent.

Too often, Pagliaro adds, partners don鈥檛 want to focus on this. 鈥淕ood succession planning is when you allow others on the team to succeed.鈥�

Planning for succession is critical

If a lawyer plans ahead properly, they can envision their best post-law firm life, says Pagliaro, adding that partners should ask themselves: i) how do I transition at a pace that makes sense; and ii) what is my objective for my post-law firm encore career?

That dream encore career can come in any form, and provide something that fills your life not just your time. Clearly, lawyers are used to being busy, engaged, and challenged 鈥� so they must recognize that they need to ensure their encore career presents opportunities for engagement, without the stresses of law practice.

Finally, know that there is no guarantee as to how long you will live or how many healthy years you have ahead, Pagliaro notes. 鈥淣ever assume you are invincible,鈥� he says. 鈥淣ever say 鈥業 don鈥檛 know what I would do if I didn鈥檛 go to work.鈥� There is a world of activities, opportunities, and needs out there 鈥� places in which people and organizations are desperately seeking intelligent, organized, and articulate folks to help, add value, lead, and instruct. It is actually fun to find your new niche.鈥�

This is the second part of a two-part blog series on the view of succession planning from the client side. In our last installment, we discussed the importance of keeping clients informed of changes in firms鈥� key partners.

Clients do not like to be told about any changes to the relationship team at the last minute, which is not surprising. Instead, involving clients up front is often a very smart decision on the part of the firm.

It鈥檚 also helpful to remember that succession can mean a number of things, especially to a client. It can mean a partner is planning to move on to post-law firm interests, an associate who may not be continuing on with the firm, or partners lateraling out to other firms. However, it may be the scenario involving a relationship lawyer and supporting legal team that is most crucial to firms.

No surprises please

In speaking of a relationship partner who had retired from an outside law firm, one Fortune 50 general counsel with whom I spoke, said: 鈥淚 felt like I just walked down the hall, and the office was empty, and the lights were off. Clearly the firm thought I鈥檇 be upset about losing him as part of the team so decided to just let me know he left and gave me the name of the person who would be replacing him 鈥� this was quite upsetting, and I almost fired the firm over it.鈥�

Clients do not like to be told about any changes to the relationship team at the last minute, which is not surprising.

Fortunately, after a few conversations, the firm was able to dissuade the client from letting the firm go, and firm leadership then involved the client in the decision about whom he wanted on the team to replace the partner who had left.

Daniel H. Weintraub, the Chief Administrative and Legal Officer of Audax Group, a leading private equity firm, says no surprises should be the rule. 鈥淪uccession planning should start at the beginning of the relationship 鈥� it should never be a surprise,鈥� Weintraub says. 鈥淵ou should build a client relationship that has succession built into it. No doubt, I would be fired if I didn鈥檛 have this redundancy put in place in our own organization.鈥�

Weintraub explains that most of the time, clients hear about succession planning when someone calls up and says I鈥檓 retiring in a week. 鈥淭his puts you in a bad position too, right? No one has focused on this but it鈥檚 critical,鈥� he says. 鈥淚f you need to ask who your person at the law firm is, then you have a problem. If my relationship is with one person, then that鈥檚 a problem from a succession planning perspective and also for me. It means I鈥檓 completely wedded into one person, so what happens if that person is gone? If I were a managing partner of a law firm, I鈥檇 make sure that succession planning was done from the top down. Avoid the surprises.鈥�

Taking the cue from the company

Indeed, Weintraub鈥檚 comment about redundancy should resonate with firms. Companies in general do a much better job developing succession planning for their executives and key sales leaders who oversee important clients and customer relationships. That is to say, clients are very savvy and aware when it comes to service teams, and their important client and customer relationships, and they expect the same from their outside service providers.

The ongoing success of any firm鈥檚 client relationships is dependent on a few important details, and critically among them is trust and loyalty.

鈥淚 don鈥檛 want to learn about your succession planning through an out-of-office reply,鈥� Weintraub says. 鈥淭he relationships should be with multiple people on multiple levels 鈥� this is strategic account management.鈥� Too often, he adds, outside law firms often tell clients who the new person is going to be without consulting with them beforehand. 鈥淭here is an arrogance to that [on the part of the firm] 鈥� I get to decide who the relationship partner is going to be, rather than being told.鈥�

The ongoing success of any firm鈥檚 client relationships is dependent on a few important details, and critically among them is trust and loyalty. However, this goes both ways. Involving clients in succession planning way in advance 鈥� three to five years at the very least 鈥� will build stronger, more loyal and more trusting relationships with important clients.

Unfortunately, most clients report that they are seldom involved in this process, which many view as an insult to them and a huge opportunity lost for a firm to differentiate itself from others. Clients value their outside counsel and see them as part of their team and involving them in important decisions will go a long way to retaining their revenue and building long-lasting relationships.

This is the first part of a two-part blog series on from the client side. In our next installment, we speak with one lawyer about their succession experience leaving their firm.

Just as they tend avoid planning for lawyer retirement, many law firm partners and leaders resist conducting cohesive succession planning. W. Scott Schulten, of , explains that just about every firm sees the succession planning process as 鈥渉ard and fraught with potential conflicts.鈥� And Roger Burton, Managing Partner of , concurs, stating many firms avoid the subject 鈥渂ecause of the difficult dynamic in addressing the transfer of client relationships and concerns around how it will play out.鈥�

Indeed, John E. Harrity of is more blunt, saying: 鈥淨uite frankly, I would say that most firms are living in the now and not thinking about the future.鈥�

No matter the reasons or excuses that many law firms offer, they must create a viable succession planning process. However, what does this process involve and how can firms ensure its acceptance and success?

Plain and simple, a succession plan identifies which attorneys will assume responsibility for which client relationships once a more senior attorney decides to retire. Once the potential replacements have been identified, these attorneys then are groomed in their new roles in order to better transition in managing the relationship without disruption, especially to the client. This grooming should include client meetings, case or matter discussions, education around understanding the client鈥檚 goals 鈥� essentially. everything related to managing the relationship.

Planning for an attorney鈥檚 departure is critical for ensuring the stability and continued working relationship with the client. Failure to plan for this change can result in client turmoil and power struggles among other firm attorneys. Succession requires managing and finessing human relationships, a task that 鈥� even with the best of intentions 鈥� is never easy. Indeed, successfully transitioning a client relationship can take years.

Overcoming obstacles

Many law firms avoid the succession issue due to a variety of real or perceived fears about hurt feelings with attorneys who may resist conversations that involve thinking about the end of their professional careers. Understandably, this is a very stressful decision, and it often takes time for clients to feel comfortable with a new relationship.

To put together a client succession plan, however, firms first need to answer these questions:

• • • Which attorneys are currently serving specific clients? If a client is seen as under-served, which firm attorney can be introduced to the relationship?
    • What types of training and mentoring will these attorneys need for any new roles? How long will that take?
    • What are the clients鈥� concerns about the potential loss of a retiring attorneys鈥� knowledge or skills? Do clients have successor preferences?
    • Are any of the firm鈥檚 key clients going through their own transition process? Does the firm have a relationship with the client鈥檚 next generation of leadership?
    • How will the named successor be introduced to clients, both socially and in a working relationship?

Starting the conversation also is in the best interest of the firm because under the American Bar Association鈥檚 Model Rules, Rule 1.3, the duty of diligence may require a lawyer to develop a succession plan. This empowers every law firm to pressure its attorneys to start the process.

Identifying the successor

To ensure that the best candidates are selected, the appropriate parties must be engaged in the process of succession planning. These include the client, the department chair, practice group chairs, and possibly the managing partner. Bringing all interested parties into the process at the outset will improve the results.

It is important to determine the kind of attorney needed for a successful succession. Law firm leaders need to look at, among other factors, the prospective replacement attorney鈥檚 character, background, experience, and shared vision of the candidate. Once someone is identified, the successor needs to be developed and coached so they can maintain and continue to grow the client relationship. For smaller law firms this can be daunting as there may only be one or two viable options.

From recent conversations I鈥檝e had with managing partners, there is sometimes no one at the firm to fill the role in the immediate future, meaning within the next two years. To prevent this problem, firms should start the succession process early so associates can be developed up to five to seven years beforehand. 鈥淚t facilitates the succession of younger partners and keeps them from becoming discouraged and leaving,鈥� says Ida Abbott, author of the book .

The goal is to find the right partner who will mesh with the client, ensuring a smooth transition. Karen Borofsky, director of administration at , explains that her firm has a two-year succession planning process that allows for 鈥渆nough time to foster relationships among [the firm鈥檚] clients and the succession partners.鈥� Clearly, firms should start now to identify and groom their next generation of client relationship attorneys and not wait until an attorney announces their plan to retire.

The 鈥渙ther鈥� succession plan

Smaller law firms that have founders or senior attorneys as managing partners are now realizing that in addition to a succession plan for individual clients, they also need a succession plan for the firm鈥檚 overall leadership. When firms are small, there may not be pool of potential managing partners to groom. And as the Baby Boomers reach retirement age in greater numbers, there will be many small firms with managing partners wanting to retire in the next two-to-five years but there鈥檚 no one to step into the role. And this often isn鈥檛 an easy role to fill quickly 鈥� managing a law firm requires business acumen, leadership, and communication skills, as well as a large dose of self-confidence. 鈥淯nfortunately, many lawyers bury their heads in the proverbial sand,鈥� says Erin Rhinehart of , adding that if firms 鈥渓eave succession planning to chance, things will, inevitably, work themselves out 鈥� just not necessarily in the most productive, efficient way.鈥�

For many law firms, especially though which may not have made this process a priority, the time is now to start such a leadership succession plan for the managing partner and all the other crucial leadership roles that exist within the firm on both the legal and administrative sides.

To better aid this process, Andrew Polott, Shareholder and General Counsel at , created a customized process for his successor, explaining that the successor started, 鈥渇irst by shadowing me, then by co-managing and taking on increased responsibilities as manager 鈥� and for the last quarter of my term [as managing partner], I acted as my successor鈥檚 shadow/coach.鈥�

Not surprisingly, leadership succession planning has been around since people started living in groups. It鈥檚 not hard, it just takes effort 鈥� and once the candidates are identified, they should be given adequate training in the topics below:

• • • Leadership skills to enhance their ability to lead the firm effectively and strategically
    • Business development skills, taught at a higher level so they understand how and why attracting new clients in order to grow the firm鈥檚 revenue and reputation is critical
    • Law firm management training that covers topics such as creating a business plan, setting a budget, overseeing operations, implementing policies and procedures, and ensuring compliance and quality standards
    • Establishing and maintaining partner relations so new leaders recognize the value of communicating clearly and frequently, soliciting feedback, resolving conflicts, fostering collaboration and trust, and recognizing contributions and achievements
    • Succession planning so they can start identifying potential successors for themselves and others in the firm, preparing them for their new roles, and facilitating a smooth transition when the time comes.

Retirement and succession planning are essential for the sustainability and growth of small law firms, as well as for the well-being and satisfaction of their senior attorneys. However, many lawyers face emotional and practical barriers to retiring and passing on their roles and responsibilities. Firms should provide guidance, support, and incentives to better help their senior attorneys overcome these challenges and embrace retirement as a positive and rewarding transition. In this way, the firm will also benefit by ensuring a smooth transfer of knowledge, clients, and leadership to its next generation of lawyers.

鈥淟awyers who have something to look forward to in retirement and realize they have many options ahead, readily plan for it, says Ida Abbott, the author of the book . 鈥淏ut some lawyers have worked so long, so hard, and so successfully, that their work has become their primary source of purpose, value, and identity.鈥�

Teresa Rider Bult, Administrative Partner and General Counsel at Constangy, Brooks, Smith & Prophete, concurs, adding that for many lawyers, it may be 鈥渄aunting to move from practicing 60 to 80 hours a week to doing nothing.鈥�

There are four main reasons why lawyers avoid retirement, which typically emerge as they get closer to retirement age.

1. 1. 1. Loss of identity 鈥� Lawyers grapple with the question of who they are beyond their legal roles.
      2. Resistance to exit 鈥� The thought of not showing up at the office becomes unimaginable.
      3. Fears about transitioning 鈥� The uncertainty of moving away from a familiar routine looms large.
      4. Failure to succession plan 鈥� Many attorneys lack a clear roadmap for the next phase of their lives.

To guide attorneys toward retirement, it is essential for their law firms to help them grapple with possibilities beyond their legal practice. Michelle Shultz, Managing Partner at Schulz Trade Law, agrees that the thought of retirement may be difficult for lawyers. 鈥淎ging and retirement are a challenge for anyone regardless of their profession,鈥� she explains. 鈥淸For] lawyers, it could be even more difficult because their identities are very much tied to their profession and it鈥檚 hard for them to let go.鈥�

What are the options?

Many attorneys derive intellectual stimulation from their active law practice, and they often worry that retirement would entail losing this mental engagement. The key lies in having something to retire to rather than merely a desire to retire from their legal practice, as astutely observed by Timothy J. Ramsey, a principal at Bodker, Ramsey, Andrews, Winograd & Wildstein. Visualizing a fulfilling retirement 鈥� whether it involves penning mystery novels or spending hours on the tennis court 鈥� can make the transition smoother, he adds.

Firms can play a pivotal role in supporting attorneys during this phase by introducing novel and intriguing activities for their post-practice life. Firm leaders should consider the following possibilities for their retiring attorneys:

• • • Exploring new careers 鈥� Some attorneys may choose to leave their law practice for an entirely different career path
    • Part-time fun jobs 鈥� Working part-time in an enjoyable role can provide a balance between leisure and productivity
    • Lifelong learning 鈥� Returning to school to acquire new skills or simply for the joy of learning is an enriching option
    • Financial optimization 鈥� Reducing living expenses to sustain retirement through social security, investments, or savings
    • Wanderlust 鈥� Traveling to explore new horizons
    • Volunteering 鈥� Contributing expertise to mentoring organizations like or other business-focused agencies
    • Relocating 鈥� Moving to areas or countries with a lower cost of living
    • Family time 鈥� Spending quality moments with family, especially grandchildren

As attorneys approach retirement age, their law firms should encourage them to step back from regular practice and explore alternative ways to leverage their experience. 鈥淭he practice of law provides great flexibility,鈥� says Michael Downey of Downey Law Group. 鈥淟awyers often appreciate having some way to use their experience, or to continue to earn some money.鈥� He recommends that retiring attorneys consider more pro bono, arbitration, or mediation work.

David Ernst, who retired after 30 years of practice and became a consultant focusing on law firm succession planning, says that he decided to 鈥渟tart consulting in this area after finishing my own succession journey because I wanted to help normalize discussions around succession planning in law firms.鈥� And Jim Pagliaro from Morgan Lewis decided in his 50s to take art history courses, then years later embraced retirement by becoming an art museum docent, passionately sharing his love for art.

Law firm support

Firms can provide valuable support by designating a key leader, external consultant, or coach to engage with senior attorneys as they approach their 60s. These professionals initiate discussions to assess several critical aspects, including:

Envisioning retirement 鈥� Senior attorneys are encouraged to describe their vision for the first week of retirement and reflect on their emotions associated with this transition.

Spousal perspectives 鈥� For those who are married or have significant others, understanding their partner鈥檚 feelings about retirement becomes essential.

Residence considerations 鈥� The choice between staying in their current home or relocating to a warmer or colder climate merits thoughtful consideration.

Health assessment 鈥� An honest evaluation of their current health status also informs retirement planning.

Legacy or financial priorities 鈥� Attorneys must weigh whether they wish to leave a lasting legacy or prioritize financial security.

Navigating retirement can indeed be daunting, and candidates benefit greatly from robust support as they embark on this significant life transition. 鈥淗aving a fair, transparent and effective retirement planning process is in the firm鈥檚 interest,鈥� says the author Abbott, adding that proactively managing the firm鈥檚 partner retirements 鈥渋ncreases the firm鈥檚 chances of retaining those partners鈥� clients,鈥� which can be key to ensuring a firm鈥檚 future.

There are, of course, necessary synergies between retirement and succession planning. Planning for retirement almost always requires a succession plan as well. However, there are certain aspects of succession planning that don’t rely on retirement. While closely related, there are sufficient unique considerations for succession planning that merit discussion of their own.

In the second part in this 鈥淧ractice Innovations鈥� series, we will look at how firms can more adequately provide for succession planning.

When the COVID-19 pandemic forced law firms and corporate law departments to quickly change their way of conducting business, many of these organizations leveraged existing business continuity plans and were able to quickly resume operations after successfully pivoting to alternate worksite location arrangements and greater employee telework. However, other organizations faltered when they found that their business continuity plans had not kept pace with the changes in their organization or were focused on responding to past situations and did not squarely match their current needs.

What differentiated these two outcomes, and are their guidelines to keep business continuity plans effective 鈥� and stay effective 鈥� regardless of the specific reasons under which the plans are deployed?

Technology is only part of the solution

Most business continuity plans today place a heavy emphasis on technology to support alternate work locations, flexible communication channels, and continued access to workplace resources. However, law firms should accept that technology, by itself, is only one of several necessary components of an effective business continuity solution.

First, before any technology can be used, workers at all levels must know that it exists and is available to them as part of an organization鈥檚 business continuity plan. Merely including a brochure in an armload of new employee orientation materials is insufficient; a better employee orientation should specifically call out the existence of a plan and go over its basics. Even better, a self-guided video or tutorial 鈥� in conjunction with written documentation 鈥� will better drive home how the plan works and who to contact in case of questions.

This basic foundational step pays real dividends. Not only does it help prepare users for more detailed training, but it also helps prevent users from constructing their own self-help measures, such as e-mailing draft or key documents to personal e-mail accounts, that might detract from the overall plan or, worse, conflict with corporate security practices.

Second, effective and practical user training is critical to ensuring that continuity measures can be successfully deployed. While initial orientation is valuable, actual training should stress not only how to access the business continuity technology tools, but also how these tools fit into existing business workflow. Training will be even more effective when it includes practicing key tasks within the continuity solution, including reaching out for assistance if a user encounters issues. This is especially important if the business continuity solution will look different from a specific tool that it replaces, like the interface of the Microsoft Outlook Web Access vs. the interface of Microsoft Outlook 365.

Don鈥檛 just test, stress-test

In addition to training staff on business continuity plans, it is important for organizations to regularly test their plans to ensure that plans can be activated smoothly. Law firms do not necessarily have to repeatedly run the identical tests; in fact, one way to keep employees engaged with the testing is to announce different scenarios or test different aspects of the plan in rotation. For example, one test could focus on establishing alternate communications when e-mail or phone service is not available; other tests could focus on accessing legal research resources and existing work product. Keeping users interested in testing increases their retention of this information, as well as increases overall confidence that these solutions will be effective if the need arises.

When assessing the technology in a business continuity plan, it is extremely important to test the technology in real-world conditions, particularly the projected increased workload on the tools themselves. Testing a remote access solution with 10 users when a typical load would be 100 users does not provide the essential data needed to be confident that the solution will work when it is needed. Many law firms discovered this in the early days of the COVID-19 pandemic; remote access solutions that were fine for supporting up to 10% of a law firm鈥檚 employees bogged down or completely failed when 90% of the law firm staff tried to use the solution at the same time.

Further, stress testing should occur after every major change to the business continuity plan, such as a significant technology adoption or update. Testing should also take place at least twice a year, if not more often, to ensure that new employees have practical experience with the tools and workflow associated with the continuity plan.

Every plan needs a backup plan 鈥� and a replacement plan

Most law firms and corporate law departments have invested in some form of technology that permits staff remote access to electronically stored files and resources via VPN, virtual desktop, or other technology. These solutions are key components of business continuity plans, and for good reason: when implemented well, they can permit lawyers and staff to perform much of their existing work, regardless of location. However, these solutions also depend on interconnections between multiple software tools, and upgrades in one of these may disrupt how the overall system runs. In addition, these solutions require a functional internet connection; users unable to connect may lose all access to their ongoing work 鈥� and the tools to recreate it.

A well-rounded plan should always include multiple avenues for staff, especially key employees, to remotely connect to law firm resources. For example, should some staff be issued cellular modems (MiFi units) in case their home network loses power or internet connectivity? Does the law firm鈥檚 remote solution support alternative ways to sign into a remote session even if Personal Identification Verification cards are lost or unavailable? Offering multiple paths to connectivity increases the likelihood that one or more of these solutions will work for the highest number of people.

A good business continuity plan will also offer guidance on how employees can stay productive even without the internet. This could include a requirement that employees always bring their corporate laptop computer home with them or be authorized to perform official business using personal equipment. Other plans have included streamlined ways for an employee鈥檚 last 20 edited documents to be cached on local storage or made available to for copying to removable USB storage (preferably encrypted and password-controlled). Good plans will also include multiple ways for employees to contact one another via phone, e-mail, virtual platforms, messaging services, and other communication channels. Again, the more possibilities, the more likely that the business continuity plan will be effective in a broad range of circumstances.

Finally, a strong business continuity plan will recognize that it must continue to improve and incorporate modern technology into its design. Law firm management should recognize that business continuity technology is not static and requires ongoing maintenance, research, and funding as both the organization and its technology needs change over time. However, even as technology changes or becomes obsolete, the business analysis that determines which legal resources are most critical and the priority in which resources should be made available to staff will likely change much more slowly.

Conclusion

It is easy to overlook business continuity planning until it is suddenly needed. However, as the legal community demonstrated with its pandemic response, effective plans can replicate tremendous functionality and perhaps even drive long-term change.

Compounding this challenge is that tax & accounting firms are facing a shortage of newer talent that will be able to step in and take over key client relationships as the older contingent retires, the Rosenberg survey noted. And many firms lack the number of rainmakers and leaders to drive the firm once that older group retires, says Allan Koltin of Koltin Consulting, adding that this presents a double-whammy for tax & accounting firms鈥� succession plans.

The good news for these firms is that there is still time to take action by making some intentional planning and investing in intersecting activities around marketing and talent development. To invest appropriately in marketing, firms needs to understand their current employees鈥� collective skill levels and then determine what skillsets they need to address and plan accordingly.

Doing so creates a so-called on the return on investments in both categories. Several such actions include:

Invest in business development among your talent 鈥� Honing business development skills for the next generation of leaders at the firm is one of the best investments firms can make. Important business development tasks such as reaching out to existing clients or getting in front of new customers initially require different skills. For younger accounting professionals, improving their relationship management skills is crucial. They need to learn how to ask the right questions, identify potential new business opportunities, and position themselves to gain the business.

The good news for these firms is that there is still time to take action by making some intentional planning and investing in intersecting activities around marketing and talent development.

Separately, firms may identify different professionals who may have excellent public speaking and writing skills, but cannot speak the client鈥檚 language in order to adequately describe how the firm could solve the client鈥檚 problem. Because this challenge involves so many different skillsets, firms may need to acquire this expertise by hiring individuals for full-time business development and sales roles.

Have career development conversations with existing employees 鈥� At the same time, firms may have the potential to groom next-generation leaders to fulfill this need for individuals in full-time sales roles. To identify internal talent, it is essential for managers and supervisors to have regular career discussions with their team in order to communicate what team members are doing well, where they need to improve in their current role, and what the future needs of the firm are.

Having these conversations enables managers and supervisors to understand what interests their current team members have and to determine how the firm might leverage these interests to address any gaps in sales and marketing. Indeed, given the labor shortage within the accounting industry, the most efficient way to address a firm鈥檚 marketing needs is to analyze the collective skillset of its existing talent and if possible, invest in their skills development to allow them to become excellent managers, rainmakers, and leaders of the future.

Develop niche-specific marketing plans for growth 鈥� One of the key differentiators that sets tax & accounting firms apart is building plans around a particular niche, practice area, or a common pain point among a particular group of clients. Indeed, firms that are taking the time to build plans at the practice level or unique customer need are seeing a positive return on investment. Net income per partner is $22,000 higher in firms that have a formal written marketing plan, according to the Rosenberg survey.

Invest in digital marketing 鈥� Many firms already have a website and social media accounts, and many firms offer webinars as part of their digital marketing footprint. With these foundational elements, it is relatively easy to modernize a firm鈥檚 marketing efforts. Simple ways to elevate digital marketing include:

• Automating the deployment of marketing tactics, whether blog posts, social media outreach, or email campaigns. Many digital marketing tools allow firms to schedule when the content goes live. Therefore, creating marketing plans, drafting thought leadership and email content, deploying social media posts, and buying software content can be disaggregated. For lower cost options, there are software solutions that can help create and curate blog posts, deliver and deploy email marketing campaigns, and schedule social media posts.

• Create a customer relationship system (CRM) that stores customer and prospect contact information, identifies sales opportunities, and records service issues. The key purpose of a CRM is to make information about every聽customer聽interaction available to anyone at the firm who might need it. This could be manual tool, such as a spreadsheet stored in a central location where everyone can access it; or something more complex that offers automated options and integration with management in one central location.

The succession planning challenge of tax & accounting firms is not going away any time soon, and is likely only to intensify in the near-future. Those firms that are taking action now by proactively assessing their skill gaps, developing the talent of existing employees, hiring to address identified needs, and modernizing how they use digital marketing tools have the best chance to thrive in the long term.

Yet, a majority of leaders of midsize law firms said they did not feel that their firm is prepared to deal with the retirement and succession of partners with 61% saying they were concerned about their firm鈥檚 preparedness. Further, most firms relied on an informal succession process and handled issues as they arose with just 37% saying they had a formal process or were going through efforts to create one.

Here鈥檚 the catch, however, these findings are from a survey conducted in 2018. Why look at today鈥檚 succession planning efforts through a two-year-old lens? , a Partner at Adam Smith, Esq., says that the situation today is roughly the same as it was then, with one major difference 鈥� law firms are talking about it more. 鈥淎 few years ago, you could barely say the phrase succession planning above a whisper,鈥� Stanton notes.

The one big development since 2018 is that 5% to 10% of the firms are pulling away from the rest because they have upgraded the practice of running their firms like a business, and this has had positive implications for their plans to transition management and clients, she explains. 鈥淭he successful firms are being more intentional about succession planning, not running away from the idea,鈥� says Stanton, adding that such firms are embracing the idea rather than sticking their head in the sand and pretending it is not going to happen.

Essential parts of the plan

With law firms realizing that they need to be run more like a business, it is more likely that firms are more willing to undertake succession planning because it is an evergreen component of a strategic plan. And as part of that plan, law firms need to account for some key considerations, such as:

Prioritizing clients in terms of revenue 鈥� The first key step in approaching a holistic succession planning process from the firm鈥檚 perspective is analyzing which clients are the firm鈥檚 most important by focusing on the biggest revenue-producing relationships and which firm partner owns these relationships. Understanding these critical elements is vital, as is knowing how billing credit is applied and which lawyers currently are serving that client, as well as having a deep bench of potential relationship-owners ready to take over.

Creating incentives and amending compensation practices 鈥� Incentivizing partners to assist in the transition of their clients is also a critical piece of the succession plan. One of the biggest concerns for retiring partners is increasing their revenue before retirement because once the partner leaves, that is it 鈥� the ties to the firm are no longer there. In addition, the firm鈥檚 prioritizing of maximum profits for the current year disincentivizes collaboration in succession planning, among other negatives, such as the firm鈥檚 rewards system being focused on originations. Further compounding these disincentives can be the partner鈥檚 practice of protecting clients, which is often driven by a mindset of my clients rather than the firm鈥檚 clients.

Assigning a project owner on firm鈥檚 behalf 鈥� It is also vital to assign a senior person on behalf of the firm to oversee the succession while it is in progress and to manage expectations that practice leaders are accountable for monitoring. Failure to execute the plan could have meaningful consequences on future efforts to manage succession for other clients.

Nudging the soon-to-be retiring partner 鈥� One of the biggest factors in a good outcome of the process is helping the retiring partner think about life in retirement. 鈥淵ou are dealing with people鈥檚 sense of purpose, self-worth, identity, and income,鈥� says Stanton. As a result, she advocates for elements of consistent gratitude, compassion, and grace because it is a fraught time for the partner who is transitioning to life after full-time work. To help the retiring partners build a plan for life after practicing law, the best firms are providing coaching services with robust financial, wellness, and lifestyle guidance, incentivizing the departing partners to be more proactive in the transition process.

To reduce the stress, these firms often hire a coach who specializes in this service to soon-to-be retiring partners. 聽Indeed, this can be instrumental in easing the hesitation by many partners to address the topic.

, of Ida Abbott Consulting, is one such coach. According to Abbott, some of the biggest common concerns are money, loss of identity, status, influence,聽and聽community because their clients and connections are most often their friends. That loss of purpose and the fear of the unknown beyond work are key barriers to partners鈥� willingness to embrace retirement, Abbott says.

Assessing talent needs and potential successors 鈥� Identifying the ideal mix of knowledge, skills, and abilities (KSA) for the client is a key step in identifying potential successors to take over client relationships. Establishing this criteria helps the firm decide how it will invest in each candidate鈥檚 custom development plan to create success in the transition. Analyzing the candidates for the new relationship owner is a great opportunity to apply the Mansfield rule, which is a program to create accountability and recognition in diversifying equity in client relationships and other key leadership roles within the firm鈥檚 structure, Stanton says.

To make the decision-making process easy, firms should ensure candidates have a solid understanding of clients’ business because increasingly clients want business solutions rather than technical legal solutions. This involves expressing recommendations in business terms and having the emotional intelligence to consider the perspective of the client when delivering them.

All the client a voice in selecting the successor 鈥� Involving the client in the transition process cannot be ignored. It is imperative for the client to have a say in terms of who takes over the relationship. 鈥淎 lot of times lawyers say, 鈥極h, I don’t want to bother them,鈥� but if you want to retain that client, you have to involve them in this process,鈥� Stanton says.

In fact, many clients say they expect as much聽notice聽as possible to ensure that they have enough time to explore all options. , Associate General Counsel at Interpublic Group, that in the case of a retiring partner, he 鈥渨ould look unfavorably on both the firm and the lawyer if the transition was not planned years聽in advance.鈥�

Stanton agreed, saying the succession planning process is one of the biggest opportunities for improvement, especially around client relationships. 鈥淲e constantly say, 鈥楶lease start this sooner. Please think through the implications. Think through what the client needs. Think through what the firm needs holistically.鈥�” Then, execute.