It is vital that professional services firms such as legal practices make succession planning an integral process within their business. This can be achieved by linking it to the firm’s overall business strategy.
This then allows succession planning to affect the firm’s long-term goals and objectives.
Leading a professional services firm requires a very different approach to providing a professional service. It is unfair to ask a candidate who has completely focused on client work for their entire career to take on a leadership role without any training or involvement in management roles in the firm, yet this often happens.
It is very easy for a partner to be immersed in the operation of their own department. If that person then assumes a senior management role they come with only one perspective of the firm. The candidate may have no understanding or empathy with other parts of the organisation.
The key for successful succession planning is to have an individual or a group of individuals with the skill sets and experience necessary who is ready to take over at the appropriate time.
Best practice firms create specific, individualised development plans for such candidates. Potential leaders are involved in key projects either as team members or team leaders. Some firms will supplement this with formal management training. This is to enable partners to become aware of the wider range of strategic and management issues the firm faces and how to address them.
Allowing potential leaders to develop a wider role in the business enables them to develop an awareness of the strengths and weaknesses of other parts of the organisation, and the personalities involved.
In addition to internal exposure, the partner should be encouraged to gain some media profile. Appropriate media training will be required and proactive support needed from the firm’s marketing and PR team.
It is always necessary to monitor performance and delivery of potential leadership candidates. It is most often not the best lawyer or accountant who makes the best leader, but one with the best leadership skills.
A leadership candidate will need a clear sense of:
where he or she wants to lead the firm to
what he or she should do and what should be delegated to others
how to listen to colleagues
how to build a consensus
how to execute decisions when reached.
No matter how good a practitioner the candidate may be, these skills are very different from a traditional lawyer’s role and therefore need to be developed and tested over a period of time.
Having a mentor to talk to and provide guidance can be of invaluable assistance to a potential leadership candidate. This may be a member of the management team or another senior partner.
This helps steer the prospective leader through the merit of personal relationships, petty jealousies, large egos and political posturing which are frequently observed in medium to large professional firms. It may also help them to really understand the culture and motivation of the firm and the views of any silent partners.
Leadership can be a lonely role, and such support before, during and after undertaking the process can be invaluable.
It should be an essential role of a leader to provide for succession. It is important for a leader passing over the reins who does not intend to retire to have a defined role to go back to or an agreed consultancy role.
It is also important for a leader to recognise their own sell-by date and that there is a clear path to be followed to ensure the reins are handed over at the appropriate time.
Partners who have not made adequate provisions or have been left with inadequate retirement provisions could end up in a situation where they cannot afford to retire. Therefore, firms ignore the growing issue of pension provisions for partners at their peril.
The key is educating and encouraging partners to make informed financial decisions at all stages of their careers and in particular in preparation for retirement.
For most partners, the best starting point is to look at what they might need in terms of income at retirement and then to plan how they will accumulate sufficient capital to finance it. Bearing in mind the long-term issues for the partnership itself, it is prudent to give partners every encouragement to start this process as early as possible. Many will not take any action unless they are encouraged to do so.
Professional services firms should develop measures and targets for success regarding succession planning relevant to the size of their business. Targets should be specific and include completing specific training programmes and utilising the knowledge from the programmes in the daily work schedule of key individuals identified as leadership material.
The goal of any good succession plan is to get the right person in place for tomorrow’s job. The way to accomplish this is to get a match between the firm’s future needs and the aspirations of individuals.
Paul Wyse is managing director of the Dublin office of Smith & Williamson