LSAG Legal Briefs - Vol 2

This represents a risk for firms, as an enormous amount of legal and institutional knowledge potentially exits the workforce over the next 5 to 10 years. Great care will be required to manage the internal transition and to maintain positive client relationships throughout. However, the majority of law firms (73%) have not put a formalized succession plan into place yet.

These national age trends from the Bureau of Labor Statistics mirror what law firms are experiencing. Respondents to the aforementioned Bright Insight survey indicate that 35% of equity partners are at or approaching retirement age, while research from Citi Private Bank and Hildebrandt Consulting noted that equity partner turnover hit a five-year high in 2017 7 .

SUCCESSION PLANS IN PLACE AT LAW FIRMS [FROM BRIGHT INSIGHT] 8

Yes, we have a formal plan that is closely coordinated Yes, but the plan is not formal or mandated at this time

33% 27% 25% 14% 1%

In-House Counsel

Boutique Firms

Other

the transition and assurance that service levels will be maintained after any changeover. The client is ultimately focused on its legal needs being met, and all transition processes should keep the client perspective in mind. Next generation: Filling vacant seats with qualified and equipped attorneys should be a primary human resources and talent development emphasis. As part of this, it is important to understand that younger lawyers may be motivated by and interested in different things than their predecessors. For example, behind compensation, a collegial work environment and work-life balance are the next two most important personal issues for law firm associates 9 . At the same time, fewer associates

All of this points to a need for law firms to be more proactively engaged in succession planning and new partner development in the coming years. This requires vision and resolve from firm leadership and buy-in from equity partners, even those that are not yet ready to retire. As law firms take on this challenge the following points should be kept in mind: Client-centric: Retirement and succession planning are personal transitions for the firm and the outgoing partners. However, the central importance of the client experience should not be lost in the changeover. Frequent and consistent communication provides clients with more clarity about what to expect during

CUSHMAN & WAKEFIELD | 23