Lexpert Magazine

LEXPERT MAGAZINE | OCTOBER 2017 65 | COLUMNS | MARKETING Donna Wannop, LLB, MBA, is a practice develop- ment coach (www.donnawannop.com) who has worked exclusively with the legal profession for over 20 years. Reach her at donna@donnawannop.com. BY DONNA WANNOP trol of their practice and their clients, it very oen happens that senior part- ners don't want to leave the firm and/or practice, and as they approach retirement they will do everything pos- sible to maintain and even tighten their hold on their clients. When this occurs, the firm is faced with a sig- nificant problem. is column takes a look at an issue that all firms are aware of, but one that is seldom discussed: the cost to the firm of clients and revenue that are lost through ineffective management of prac- tice succession. THE PROBLEM Although it is universally recognized by law firm leaders and management that proactively managing client relationships when partners leave is critically import- ant to the maintenance of the firm's client base, succession planning is, unfortunately, something with which most firms continue to struggle. Partners who don't want to retire will understandably be inclined to hold on to anything that they believe will better their chances of a continuing career and income. is means they will want to hold on to the relationships they have with clients they have historically managed and been responsible for. e formulas and criteria that most firms use to determine partner compensa- tion are in large part responsible for propri- etary behaviours. It is a simple matter of operant condi- tioning: people engage in behaviours that they get rewarded for. When partners' compensation is tied to the clients they are responsible for and the work that they re- tain a tight control over, it is not surprising that they will become and remain highly territorial, even as they approach retire- ment age. e more tightly a partner controls re- lationships and the more effective that partner is at excluding other firm members from those relationships, the higher that partner's compensation, and the more in- dispensable he or she becomes to the firm. is increases the likelihood that the firm will be willing to keep him or her on past any otherwise mandatory retirement age. THE SOLUTION It stands to reason thatt, if law firm com- pensation systems recognize and reward behaviours that run counter to effective succession management, firms must mod- ify their policies and practices and start to reward more productive behaviours in or- der to better manage client transitioning. Firms should therefore consider ways in which they can reward more desirable be- haviours in partners. For example, firms may explore how partners can be finan- cially compensated for transitioning work (rather than for holding on to work), and ways in which compensation for their work with particular clients might extend beyond the point in time at which respon- sibility for the client is passed along to someone else in the firm. It is time that firms take a closer look at what lies behind a longstanding problem that is only becoming worse as mandatory retirement from law firms is on the rise and the mandatory retirement age drops, and as law firms deal with an expanding demo- graphic of near-retirement-age partners. It's important to generate new business, but just as important to hang on to existing clients when partners leave WE ALL TEND to think of marketing as a way to generate new business, and it is; yet while it is true that getting new business and growing your practice is an important goal of marketing, it is just as important, if not more so, to retain the business you al- ready have. Providing your clients with excellent ser- vice and finding ways to add value on a day- to-day basis certainly helps to ensure that existing clients will remain loyal to your firm. However, change is inevitable, and there will undoubtedly be times when your firm will have to work through the kinds of internal change and upheaval that may threaten relationships with existing clients. Short of an out-and-out disaster such as the collapse of a firm or a mass exodus of partners, this type of situation most oen occurs when senior members of the firm re- sponsible for key client relationships leave the practice. If the departure is unexpected and abrupt, there is little that a firm can do in advance to smoothly and effectively transition existing clients to new lawyers in the firm. In general, though, there is full knowledge of the upcoming departure well in advance of the event: for example, when senior partners are nearing retirement. Although some lawyers look forward to retiring and are willing to relinquish con- Managing Succession PHOTO: SHUTTERSTOCK

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