Transition and Succession Planning for Law Firms: Securing Core Knowledge

Transition and Succession Planning for

Law Firms: Securing Core Knowledge
CAROLINE POYNTON

CAROLINE POYNTON

PUBLISHED BY IN ASSOCIATION WITH

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Securing Core Knowledge
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 Transition and Succession Planning for
Law Firms: Securing Core Knowledge
CAROLINE POYNTON

PUBLISHED BY IN ASSOCIATION WITH

Contents

Executive summary ............................................................................................................VII

About the author................................................................................................................IX

Acknowledgements ............................................................................................................XI

Chapter 1: What is succession planning? ........................................................................... 1

The leadership succession challenge ..................................................................................... 1
Why firms are overlooking the broader issues ......................................................................... 1
Succession planning: A new paradigm ................................................................................... 3

Chapter 2: Succession planning through retirement ........................................................... 5

The complication of mandatory retirement .............................................................................. 5
US retirement issues ............................................................................................................. 6
Finding a middle ground ....................................................................................................... 8
Rethinking the future ............................................................................................................. 8

Chapter 3: Succession or transformation? ........................................................................ 11

The changing demographic of law ....................................................................................... 11
A growing desire for freedom .............................................................................................. 12
Law-firm loyalty may be a thing of the past ........................................................................... 14
The impossible partnership carrot ......................................................................................... 14
What to do when partners have limited confidence in those coming up behind them ............... 15
The implications for succession planning .............................................................................. 16
A new kind of law firm ........................................................................................................ 16
Facing up to the end of an era ............................................................................................ 18

Chapter 4: Mentoring, training and the role for business services in

succession planning ......................................................................................................... 21
The impact of recession....................................................................................................... 21
The opportunity for business-services integration ................................................................... 22
Mentoring for law firms ....................................................................................................... 23
Setting up a mentoring programme ...................................................................................... 24
The importance of reward ................................................................................................... 25
Coaching and mentoring .................................................................................................... 26

III
Contents

Three things every firm should do today to ensure a sound succession planning process .......... 27
Leadership training.............................................................................................................. 27
Creative training for time-pressured fee-earners .................................................................... 29
The importance of business service integration ...................................................................... 30

Chapter 5: Knowledge sharing and retention to support succession planning ................... 31

Knowledge retention ........................................................................................................... 31
Is retaining knowledge like retaining water? .......................................................................... 32
Improving intergenerational knowledge flow ......................................................................... 34
Increasing success rates with social media ............................................................................ 35
Knowledge sharing through social networking ....................................................................... 36
The value of KM systems to succession planning ................................................................... 36
What should KM professionals be doing? ............................................................................. 38

Chapter 6: The leadership challenge ................................................................................ 41

Overhauling the partnership model ...................................................................................... 41
Bringing teams and capabilities together............................................................................... 42

Case study 1: Succession planning – Identifying and preparing the next generation
of leaders ....................................................................................................................... 45
Generational impact ........................................................................................................... 46
Avoid the big mistakes ........................................................................................................ 47

Case study 2: The passing of the baton – Transitioning client relationships ....................... 49
Transitioning relationships .................................................................................................... 50
Performance and productivity ............................................................................................... 50
Personalities and practices ................................................................................................... 51
Reward systems ................................................................................................................... 51

Case study 3: Borden Ladner Gervais – Taking a holistic approach to

succession planning ......................................................................................................... 53
The recruitment link to effective succession ........................................................................... 54
Mentoring .......................................................................................................................... 54
Leadership training.............................................................................................................. 54

Case study 4: Mills & Reeve – The knowledge-management approach to

succession planning ......................................................................................................... 57
Getting fee earners to pass on knowledge ............................................................................ 57
Technology support ............................................................................................................. 58
Training and succession planning ......................................................................................... 59

Case study 5: Eversheds – Talent management as a succession strategy ........................... 61

Strategy at Eversheds........................................................................................................... 62

IV
 Transition and Succession Planning for Law Firms: Securing Core Knowledge

Case study 6: Weightmans LLP – Creating a culture of honest communication .................. 63

Meeting the very different needs of the modern lawyer ........................................................... 63
Training and mentoring ....................................................................................................... 65

Case study 7: Macpherson & Kelley Lawyers – A smaller firm perspective ......................... 67
Engaging lawyers ................................................................................................................ 67

Case study 8: Knowledge harvesting ................................................................................ 69

Definition ........................................................................................................................... 69
Process .............................................................................................................................. 69
Publishing........................................................................................................................... 72
Managing risk .................................................................................................................... 73

Case study 9: Addleshaw Goddard – A fresh look at knowledge capture .......................... 75

Taking a team approach ..................................................................................................... 75
Identifying successful existing knowledge models .................................................................. 76
Linking to performance........................................................................................................ 78

Case study 10: Reed Smith – In search of... search ........................................................... 81

Too many documents, too little time ..................................................................................... 81
Searching data, people and expertise ................................................................................... 82
The importance of ease of use ............................................................................................. 83

Case study 11: Clifford Chance LLP – Wiki gardeners ....................................................... 85

Examples of wikis in use at Clifford Chance .......................................................................... 85
The right initiative at the right time ....................................................................................... 86
Challenges and the role of the KM professional .................................................................... 87
Take the plunge .................................................................................................................. 89

Case study 12: Optim Legal – The next-generation law firm ............................................. 91
Challenging the traditional partnership model ....................................................................... 92

Index ............................................................................................................................... 95

V
Executive summary
MANY BUSINESSES, including law firms,
will be looking optimistically to the year
ahead following a dire 2009. Having
survived one of the worst recessions in living
memory, organisations are looking forward
with renewed confidence to an improving
economy and better business conditions.
Beneath the surface, however, a potential
demographic crisis has been looming, and
one that has likely been exacerbated by
short-term thinking in recessionary conditions.
For many firms, the economic troubles
may well have put on hold any thoughts of
succession/transition planning, but this failure
to consider the ramifications of an older and
soon-to-retire population could spell disaster
as firms lose critical knowledge and expertise
together with key personnel.
According to a recent survey by
PricewaterhouseCoopers of over 300
companies across 12 industries, the
percentage of managers and executives
eligible for retirement within the next five
years rose far more in 2008 than in 2007,
compared to other employees. Quite simply,
the ‘baby-boomer’ generation is nearing
retirement and will soon leave their firms.
Generation X should be lined up to take
their place. But for one thing, this generation
is far smaller than the baby boomers. Not
only that, but they often have different
aspirations. A noticeable trend in recent
years, for example, is law firms introducing
alternative career paths to partnership.
Combined with increasing calls for flexible
working and a fair work-life balance among
younger generations, a trend is emerging
that is overhauling assumptions of a
successful legal career – creating a new
vision in which partnership (or reaching the
‘top’) no longer necessarily signals success.
Increased job mobility adds to this
generational melting pot of challenges to
potentially threaten a firm’s long-term stability.
Few lawyers today, for instance, would expect
to spend their whole careers with just one
firm. Firms now have to fight to both attract
and retain the best talent in an increasingly
competitive market. They are also always at
risk of losing their critical expertise – which
ultimately also means their clients.
Of course for many firms, such mobility
is not new. Many have become adept at
sophisticated recruitment strategies based on
sound business-development and marketing
principles that successfully sell the firm. But
the recession has introduced an entirely
new dimension to the recruitment and
retention challenge facing firms. In the fight
for survival, redundancies have become
commonplace as well as budgetary cutbacks
impacting long-term projects or those
programmes perceived to be ‘non-critical’
– i.e., those such as succession planning.
Now, with a reduced and possibly more
dissatisfied workforce and a demographic
crisis on the horizon, firms are facing a crisis
– one in which the younger generation are
neither willing nor suitably trained to take
over the reins of leading their businesses.
Transition and Succession Planning
for Law Firms: Securing Core Knowledge
VII
Executive summary

examines emerging demographic trends a business crisis, as law firms lose vital
against most recent developments in knowledge and the means to effectively
the legal profession to assess just what serve clients. By taking stock of the challenge
challenges lie ahead. It then looks to provide now, firms will not only ensure for themselves
realistic and simple solutions that can be a more secure organisational set-up, but
cost-effectively applied in a post-recessionary will also have the means to impress clients
environment. The report considers numerous with the kind of long-term thinking that
issues including: protects their business interests. In the post-
recession environment, firms will be keen
„ The impact of Generations X and Y on to demonstrate to clients their long-term
the practice of law in the 21st century. resilience following months of uncertainty.
What do senior management need to Having a sound transition plan will be a
know to ensure a smooth transition to key part of achieving that goal. A good
the next generation? transition plan will also result in a team of
„ The retirement of the baby-boomer more engaged and loyal lawyers who want
generation. What ongoing risks does this to stick with their firms – a surely much
pose to a law firm’s business stability? desired outcome in an environment where
„ The current preparedness of the younger nothing stays still for very long.
generation to take the reins of their
businesses. Do they even want to follow
in the retirees’ footsteps?
„ To what extent has the recession turned
an ongoing succession challenge
into a potential crisis, as numbers of
lawyers, support staff and resources
have been cut?
„ What are the potential solutions – how
can strategies such as mentoring,
leadership training, after-action reviews
and interactive learning help enable
smooth transition between generations?
„ What role can technology – and
particularly Web 2.0 tools – play in
addressing the succession challenge?
„ And whose responsibility is succession
planning anyway?

In the next five years, law firms will be

transitioning their businesses to the next
generation. Those that fail to implement
succession strategies now may well find
themselves with a leadership gap in just
a few years’ time. And what may start as
an internal problem will soon escalate to

VIII
About the author

CAROLINE POYNTON is a business journalist, with particular expertise in the legal sector. Before
going into freelance journalism in July 2007, she was for six years editor of Managing Partner
magazine, an Ark Group publication dedicated to senior management in the legal profession. Since
working as a freelance journalist, she has written numerous features, as well as in-depth reports,
not only on the legal profession, but also on corporate communications and business management
generally. She has also worked as a freelance editor on publications including Ark Group’s FD
Legal and the KermaPartners Quarterly, a publication published by management consultancy
KermaPartners. She has published several reports with Ark Group, including Business Continuity and
Disaster Recovery for Law Firms (2008), Managing the Evolution of Libraries and Information Services
(2008) and Delivering Business-Critical Knowledge Management (2009).

IX
Acknowledgements

THE AUTHOR would like to thank the many kind contributors to this report, whether for their general
support or specific guidance. In particular, many thanks to those who contributed case studies or
features to the report – Tom Baldwin, James Cotterman, Sam Dimond, Mark Gould, Phyllis Weiss
Haserot, Nick James, Norman Letalik, Mark Landon, Jay Liebowitz, Angus MacGregor, Cora Newell,
Duncan Ogilvy, Damian Paul and Tom Young.

XI
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