BALTIMORE (AP) — Planning for a law firm’s future takes many forms, depending on the size of the shop. But regardless of firm size, one thing remains consistent: Succession planning is critical and often overlooked.
“Succession planning for large, medium and small firms is something very integral to firm longevity and success,” said Randi Lewis, Maryland-based managing director of attorney search firm Major, Lindsey & Africa.
Succession planning has two components: identifying and grooming the next generation of leadership and maintaining client relationships, which can be a bigger challenge for some firms, Lewis said.
At firms with roughly a dozen lawyers or more, it’s up to leadership to identify rising stars and groom them early on to take leadership roles in the firm. That includes both putting associates on committees within the firm and giving them face time with clients.
“You want to introduce those lawyers over a period of time to your client and give them full responsibility for connecting and running matters for those clients,” Lewis said. “It happens over a long period of time.”
On the client services side, senior partners may have closely held clients both in terms of the amount of work they’re doing for the client and the amount of contact they allow other lawyers at the firm to have with that client. As the person who gets the financial reward for a certain client’s business with the firm, that attorney should start giving ownership to other junior attorneys working on those clients.
“That’s how people can rise up in terms of their abilities and them seeing a future at your firm,” Lewis said.
Incentivizing up-and-comers shows those attorneys that they are valued by the firm while also allowing the firm provide a high level of client service, Lewis added.
Succession planning at law firms is about more than thinking about leadership for the entire firm; it also applies to individual practice groups. Practice group leaders incentivize other to step up, even if it means the leadership gets less money from a client’s business, Lewis said.
To start identifying attorneys with leadership potential, the process may begin when attorneys start out as associates and get on a committee, such as recruiting, or in another leadership role. Then, based on their performance, the associates will get more responsibility over time.
“The cream rises to the top,” Lewis said.
Firms that don’t do succession planning often run the risk of losing their best attorneys as junior partners may start to look into changing firms, Lewis said.
While lack of succession planning can hurt the future of a large firm, solo and small firm practitioners, who make up the majority of attorneys in Maryland, are often at greater risk of not planning ahead.
“We are a profession that is focused on solving other people’s problems and we don’t have the time or energy to focus on our own,” attorney Frederick R. Franke Jr. of Franke, Sessions & Beckett LLC in Annapolis told The Daily Record before a panel on succession planning at the Maryland State Bar Association annual meeting in June.
“Give some thought to this now when you’re robust, you’re healthy, your practice is thriving,” said panelist Alvin I. Frederick, a principal at the Law Offices of Eccleston and Wolf PC in Hanover. “What are you going to do when you’re ready to stop? Do you want someone who doesn’t know you or your family to step in your shoes to wrap up your law practice?”
It’s never too early to start planning for the future of a law practice, said Bar Counsel Lydia Lawless.
“We’ve seen attorneys, a few solos, in the past few years that have died unexpectedly and in the middle of their careers. It’s not something just for the older members of the bar,” Lawless said.
Attorneys can take the first step in succession planning including the name of another attorney on their retainer agreement who will fill in if the primary attorney has a medical emergency. The retainer agreement may also contain a provision explaining what the attorney will do with closed filed if the attorney sells the practice upon retirement, Frederick said.
If an attorney is no longer able to practice and does not make any arrangements, Lawless’ office steps in and sets up a conservatorship.
Under the Maryland Attorneys’ Rules of Professional Conduct, bar counsel can ask the circuit court to appoint a conservator from that office or another member of the bar. The conservator’s job is to gather all client files, take an inventory and make sure active client files are returned to the client or given to successor counsel. The conservator also takes possession of attorney bank accounts to determine if there is any client or third party funds in those accounts and return then to the right person.
This year, bar counsel’s office established 10 new conservatorships, up from five in fiscal 2017. The Attorney Grievance Commission’s latest annual report calls this increase “substantial.” The office closed 10 conservatorships, and 34 remained open at the end of the fiscal year, the report states.
Information from: The Daily Record of Baltimore, http://www.thedailyrecord.com