jordanfurlong + succession   15

Carbon opens door for retiring partners to sell client portfolios - Legal Futures
Carbon, which recently announced a share ownership scheme for its lawyers and staff, said that, by placing a value on partners’ client portfolios, they could transfer them directly to other partners for cash in a way that is not possible in traditional firms.

Alternatively, the Carbon model also allows soon-to-retire partners to appoint a junior lawyer to manage their clients on a day-to-day basis, while they maintain a strategic overview over their practice.

If nobody wants to buy the practice, Carbon can appoint a lawyer to manage it.

Equally, a partner approaching retirement is still able to carry on working, as the firm does not have a mandatory retirement age.

Michael Burne, Carbon’s founder and chief executive, said: “We can see that the traditional path to retirement for equity partners no longer works. Partners leaving LLPs are increasingly concerned about their financial and career options.

“They have spent their entire careers building up a portfolio of clients; they still want to work and don’t want to just throw this capital away – they want to be in control of their futures.”
retirement  succession 
april 2019 by JordanFurlong
Why the War for Talent Is Escalating for Law Firms - Attorney at Work
The diversity imperative. Law firms have gotten the message from corporate clients that legal teams handling their business need to be more diverse. Virtually all law firms that we talk to are encouraging us to recruit diverse attorneys. As a result, the competition to recruit such lawyers is extremely intense. Moreover, statistics show that minorities and women leave their firms throughout their careers at a much higher rate than the overall average. Firms are just beginning to grapple with the fact that the traditional “assignment and mentoring” approach to associate advancement tends to reinforce unconscious bias against diverse lawyers. As a result, many firms have to focus on different methods to ensure the retention of diverse lawyers.

Difficulty implementing succession planning. Law firms are unique organizations in that clients tend to be tied to one attorney who is the point person for all, or nearly all, of their legal work. Studies show that nearly 35 percent of their business is tied to lawyers who are over age 60. Yet firms have struggled with transitioning those clients to more junior lawyers within the firm. Much of this is tied to the largely origination-based compensation of most firms, which makes it difficult for senior lawyers to transition work for the good of the firm, and also make it difficult to incentivize the up-and-coming lawyers. As a result, those lawyers are more apt to change firms or leave private practice entirely. (And in many cases, the client leaves the firm as well.)
firms  talent  diversity  succession  generations  strategy 
february 2019 by JordanFurlong
When it comes to succession planning... - LAC Group | Knowledge & information managed services
Many law firms focus primarily on the managing partner or the management committee when it comes to succession planning and leave the various departments to work with human resources or to fend for themselves when it comes to planning for the future. This can be especially problematic because it is not uncommon for law firm support staff, including library directors, to have significant tenure at their firms, sometimes 20, 30 or even 40 years of service.  When these individuals retire or leave the firm, they take with them a wealth of institutional knowledge.

As of 2018, nearly half of the Baby Boomer generation—those born between 1946 and 1964—have already moved on or will soon be retiring. If your chief law librarian or library director is a baby boomer, chances are good that he or she is getting close to a retirement decision. Retirement of a well-regarded, effective leader requires planning, and it should start well in advance of the farewell parties.
km  succession 
february 2019 by JordanFurlong
Succession Management Pillar 4 of 5: Leadership Succession and Knowledge Transitions | Rainmaking Oasis, LLC
In the context of this succession topic, we are defining knowledge broadly: it could be in the form of unique institutional knowledge a senior partner has of the firm or of clients, it could be a distinctive area of expertise that no one else in the firm has fully developed or it could be other important community-facing connections and ties. Any one of these could diminish something valuable the firm currently benefits from.

Our Pillar 4 post recommended several steps to help firms analyze its demographics in anticipation of possible retirements over the next ten years. It is important to consider what special skills and knowledge each partner aged sixty and older contributes to the firm and to assess the strategic importance of senior partner expertise, roles, gaps and threats.

There are a number of considerations and steps to take:
succession  km  leadership  diversity 
september 2018 by JordanFurlong
A Present-Tense Solution to Law Firms’ Short-Term Thinking | The American Lawyer
Molot has figured out a sort of backdoor to provide today’s partners with permanent equity. And that is by spinning off a firm’s back-office operations and granting partners long-term equity in what may be called a “service co.” Molot said Burford is actively discussing financing this structure with major firms today. He expects a deal will eventually close—it’s not just a hypothetical.

“I think liberalizing the ethics rules is a good idea,” Molot told me. “Because you’re not looking to move the entire profit center of a law firm into a permanent structure, only a slice of it, I think that can all be done now without any change.”

Molot said he couldn’t go into all the specifics of how the structure would work, but he said there would be enough value in a potential spin-off entity to create the types of long-term incentives he wrote about years ago.

“The reason I think there is enough value in that non-legal services company is because you don’t need to get a majority of the profits to that entity,” he added. “You still want a majority of the profits to flow to the partners who are generating them. A minority [of profits in the spin-off] is plenty. I’m not looking to revolutionize the way lawyers practice law. I’m just looking for an adjustment at the margins that rewards partners who build long-term value with a nest egg when they retire and that incentivizes ongoing performance and long-term thinking.”

In an article this week for a Burford publication, Molot wrote that beyond the long-term incentives, there are tax advantages to this spin-off structure. Partners’ equity ownership, when sold, would be taxed as capital gains rather than personal income. And for ongoing operations, the back-office operations could be structured as a pass-through entity, which receives tax preferences in the 2017 tax law.

Much has been written about the varying desires of differing constituencies inside a law firm. That often inhibits change. But one reason I think this structure may actually work—or why it would at least be intriguing to a managing partner tasked with coalescing a firms’ constituencies—is that it benefits almost all groups.

I’ve written already about the benefits to senior partners. Equity into retirement can be a much-needed nest egg. Junior partners would benefit from knowing that the senior partners at their firm are invested in their long-term future. The same can be said for associates. And wouldn’t clients like to know that the partners they trust today are invested in training the partner they can trust next year?
partners  equity  succession  strategy  innovation 
july 2018 by JordanFurlong
Succession Management Pillar 1 of 5: Transition Management and Retirement Process | Rainmaking Oasis, LLC
Done correctly, as described in our post The Succession Management Continuum – Where is Your Law Firm? succession planning is best done on a continuum as part of the ongoing talent lifecycle. It is not something just to be attended to as partners near retirement.  It is not surprising that Altman Weil found that only 31% of firms have a formal succession plan as that number is probably even higher than the number of firms that have a strategic plan (or any mandatory partner business plans for that matter!)
july 2018 by JordanFurlong
Succession Planning: The Problem and a RoadMap | Rainmaking Oasis, LLC

There is no one way to establish and execute an effective succession program.  The following provides an initial framework incorporating the some of the steps your firm could take.
july 2018 by JordanFurlong
Question of Month: Succession Planning: Why is it Radioactive? | Adam Smith, Esq.
What is the primary explanation for this evidently irrational behavior?

These are the choices we gave you and how you voted:

The people who would be stepping aside are the very same people who would need to initiate the succession effort. (41%, 39 Votes)
Law firm partners fundamentally don’t give a fig about the future of the firm; the day they walk out the door is the day their interest ends. (39%, 37 Votes)
The conversation about passing the baton would be awkward and uncomfortable. (14%, 13 Votes)
Emphasizing detailed plans is over-wrought; these things happen organically. (3%, 3 Votes)
There are no obvious leaders in the next generation. (2%, 2 Votes)
I don’t want to think about it. (1%, 1 Votes)
february 2018 by JordanFurlong
Planning for Succession: Part One – Slaw
Aside from the enormous gap in business experience and leadership that this might leave, this also presents a more pressing business gap: the primary relationship with key clients. In a recent Altman Weil survey, it was found that for the majority of the law firm respondents, 50% – 70% of the business base was controlled by partners aged 60 and older. In other words, the firm’s business was controlled by the lawyers closest to retirement or most likely of experiencing a serious illness. Determining how to transfer this knowledge base, skill set and these client relationships cannot be left until the last moment. We need to predict and then actively plan for these transfers to the next generation. Unfortunately, that requires that we know when retirements will take place. And that can be tricky because senior partners are hesitant to declare their retirement for three good reasons:
august 2017 by JordanFurlong
An Aging Wilson Cribbs and Goren Planned Ahead for a New Generation at the Helm | The American Lawyer
Reid Wilson was convinced that the future of his firm, Houston-based Wilson Cribbs and Goren, depended on having a younger lawyer at the helm. So he started grooming his protégé, Anthony Marré, to succeed him as managing shareholder even before Marré knew he was in line for the top job.
Wilson, who served as managing shareholder of the real estate boutique firm for about 20 years, said the firm's management committee started thinking four years ago about the steps they would need to take to successfully pass the management reins to a younger group of lawyers. But change can be difficult, and the firm decided to take it slow.
Three years later, in February 2016, the firm named Marré managing shareholder and Wilson took on a new role as chairman. Marré was 34 years old.
Both Wilson and Marré say the transition has gone well, and the firm has prospered in the year since Marré assumed the firm's top job. The story of how Wilson Cribbs was able to pass the mantle from a group made up of firm founders to a new generation—methodically planning for the change of power—demonstrates how aging firms can successfully plan for succession and survive over many decades.
march 2017 by JordanFurlong
How to be Successful at Succession Planning - Attorney at Work - Attorney at Work
Mark Twain is said to have remarked, “Everybody talks about the weather, but nobody does anything about it.” That quote came to mind when I heard about a new book by veteran law firm consultant John W. Olmstead, “The Lawyer’s Guide to Succession Planning: A Project Management Approach for Successful Law Firm Transitions and Exits.”
march 2016 by JordanFurlong
Is it time for you to go, Joe? - Bernero & Press
Second, firms need to start these conversations early because they are difficult. For many lawyers, their work is their life and they may not want to go gently away. And even those who look forward to stopping can’t miss the intimations of mortality that are encroaching. (Of course, my friend, everyone needs an estate plan but you don’t really expect I’ll ever have to use it, do you?) By starting early with their partners, whether at age 55 or 60, firm leaders can eliminate some of the drama and make the end of a partnership seem a natural, expected transition. Of course by starting early some firms may spook colleagues to leave prematurely. But I assume that firm leaders already keep a list of flight risks, of those who can’t afford or bear to contemplate stopping: the 60-year-old who has just started a third family or the pale partner who has not taken a vacation since making partner in the first Reagan administration. The needs of those outliers can’t govern the firm’s policy, at least not at most places.
succession  partners 
september 2015 by JordanFurlong
A Lateral Boom of Older Lawyers | The American Lawyer
Hession's choice to switch firms rather than go gently into that good golf condominium seems to be an increasingly common one. Half of respondents to a flash survey of lawyers at Am Law 200 firms by ALM Legal Intelligence in June indicated that their firm had hired a partner or counsel in the past 12 to 24 months who had reached, or was about to reach, retirement age at their previous firm.
What's more, a growing number of lawyers are continuing to work well past the traditional 60 or 65 years of age. Our ALM Legal Intelligence data indicates that 6 percent of all Am Law 200 partners are 65 years old or more. (The data was based on their graduation dates from law school as recorded by Rival Edge, which doesn't include titles such as counsel that many firms use.) According to statistics from the U.S. Department of Labor, about 10.9 percent of U.S. lawyers in general are 65 or older. A recent survey by consulting firm Altman Weil Inc. finds that partners age 60 or older control 30 percent of revenue in U.S. law firms with 50 or more partners.
succession  retirement  laterals  partners 
august 2015 by JordanFurlong
Your Boomer Partners are Retiring. Is Your Firm Ready | The American Lawyer
About 16 percent of the partners in the nation's top 200–grossing law firms are 60 years old or older. And more than half of them are at least 65. Collectively they are at or nearing retirement. For Big Law, they are the leading edge of the baby boom generation that has transformed or at least swollen virtually every institution they've encountered since arriving on the scene in the heady years that followed the end of World War II.
succession  demographics  leadership 
may 2014 by JordanFurlong
Succession Part 2: Transitioning to Tomorrow's Leaders -
As noted in our previous post Succession Part 1: Holding onto Clients When Senior Rainmakers Retire, over the next ten years over 65% of baby-boomer, equity partners are expected to retire. (Since we focused on Transitioning Clients in that post, we will not address it again in this one.) Many of these partners likely also are rainmakers, strategic advisers both within the firm and with clients, have deep practice knowledge and likely serve in a management capacity in their firms. As retirement looms ahead, firms need to develop effective transition strategies for next generation of leadership.
leadership  succession 
august 2013 by JordanFurlong

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