Arguably one of the most important things a partner should and can do for his or her firm before he/she retires is choose and groom a suitable successor. Given the ageing in the profession worldwide in recent decades succession is a subject that is getting more and more attention, and rightly so.
More and more clients are wanting advice on how to address succession within their firms. A common theme one comes across however is that it is assumed there is some sort of single system or process one can put in place which will address the matter and that will be that. It is also sometimes assumed the issue can be addressed ex post facto, sort of ‘in arrears’, and all will be well. Unfortunately it is not so easy, nor should it be. It is far too complex a subject for that to be the case. These are some of the many reasons why succession is not properly addressed by professional service firms.
For instance, for the right person to succeed a partner it would normally take years or even decades of preparation by both the partner retiring and the successor in relation to his or her personal brand, , technical skills, practice area, industry sector, staff and most importantly, clients. There are many things that need to be taken into account and put in place over time.
It is relatively easy to do a quick test on how your firm is travelling in the area of succession. Think of the last half dozen partners who retired or left the firm. How many developed suitable successors who covered the items mentioned above? Go further, ask how many left anything of lasting benefit in the firm? You may be surprised and saddened at the outcome.
Succession planning must become part of the DNA of the partnership and one of the most important duties for every partner. Unfortunately, due to pressure on fee production and such matters, important things like succession planning doesn’t get enough attention when it should, during the lifetime of a partner. Nor do partners generally receive credit for doing or having done anything about it. As a result they don’t feel it has true value and warrants intrusion into their busy lives. If they do give it thought, it doesn’t necessarily resonate or translate into action as it seems such a nebulous, long term, complex issue!
It is one of the many important things that need to be taken into account in any partner performance, development or feedback system implemented in a firm. In fact this should be a critical contribution criterion. However it barely gets a mention.
Properly implemented and handled, with proportionate attention given to it at the right times, it can be a massive boost to a firm when such a transition takes place seamlessly on the retirement of a partner, especially a heavy hitter.
This matter is closely related to the question of ‘capital fabric™’, a concept I coined some decades ago to encourage partners, and latterly firms, to place adequate attention on ensuring they contribute to the fundamental, long term, foundational strength of their firm in some meaningful way. Grooming talented successors is certainly one way this can be done.
I will be addressing a group of legal practitioners in Southern Africa in August for the South African Accounting Academy on this important topic. Typically they are an innovative group and I hope to learn of some interesting approaches to succession being adopted in that part of the world. I will be sure to share those in a follow-up post.
Sean Larkan, Principal, Edge International