An Uncertain Future
Anywhere from 50 to 75 percent of law firms have no formal succession planning process in place.
BY PAMELA MARQUIS
It is an unwavering certainty: Time moves on. Though it is hard to conceive, one day Drew Brees will be on the sidelines and his successor will be taking the snaps as he begins to try and break Brees’ sterling records. It’s life, the way of the world. No matter how brilliant the leader, he/she will inexorably fade into the background as the young inevitably take their seats in their leather executive chairs in the corner office.
While this is certainly not a problem unique to law firms, depending on which report you read, anywhere from 50 to 75 percent of law firms have no formal succession-planning process in place.
According to legal industry consultant Altman Weil, in his report Law Firms in Transition, in 2015 nearly two-thirds of the biggest law firms had partners age 60 and older who controlled at least one-quarter of the firm’s revenue. Weil’s research found that only 31 percent of such firms had a formal succession-planning process. Many experts believe that if law firms fail to implement succession strategies now they may well find themselves with a leadership gap in just a few years’ time.
Law firms today are made up of lawyers with almost 50 years of generational differences working together under one roof. As such, moving a firm from the first to the second generation, or even third generation of leadership can prove to be a difficult task.
But some local firms are moving forward with their strategies. Those such as Bruno and Bruno, a family firm that began in 1950, know the importance of carrying on their traditions of excellence. Managing partner Joseph M. Bruno says his strategy grew out of his own aging process and the passing of his father, Frank Bruno, two years ago.
“While, the end is not near, I hope, the loss of my father has put into perspective its reality,” says Bruno. “So in my desire or hope to keep what our family has built, I am motivated do what I can to keep it going.”
When Bruno was a first-year law student, his father approached him with a proposal.
“He told me that if I refused, he would never make a similar offer,” Bruno says. “I would never work for him. The proposal was that I would be his partner, but as each of my five brothers graduated law school, if they did, each would become a partner with the goal that we would all be equal partners, at which time my father would withdraw. Four of my five brothers became lawyers and all joined the firm. It was a very tough experience for me, but in time all of my brothers/partners became excellent lawyers. I cannot recommend this method, and in the case of my son, we did not use it. Rather he had to earn his partnership.”
In 2015, nearly two-thirds of the biggest law firms had partners age 60 and older who controlled at least one-quarter of the firm’s revenue.
He believes one of the most important things to have in place in a successful succession is having the right people to train. The firm looks for associates who can move into positions of power, making sure they fill the firm’s needs.
“First, I try to identify what skills the associates have or don’t have,” he says. “I try to steer them into the direction which best reflects their talent. In the law business, there are three — and this, of course, is an overgeneralization — distinct talents necessary to sustain a law firm in these extraordinarily competitive times,” Bruno says. “First, you need a rainmaker or marketer. Second, you need an administrator, and finally — and this is just me — you need a litigator, or if transactions are the mainstay, a person with the temperament to handle detail. I say ‘just me’ because a millennial may see the litigator as a dinosaur.”
Steve Lane, managing partner with Herman Herman & Katz, a three-generation firm founded in 1942, agrees that having the right people is key to a smooth succession and that his firm primarily hires from within.
“We rarely hire from other firms,” he says. “Almost all of our new hires are our former law clerks,” he says. “We have worked with them for a year or more, so when we hire them we have a good handle on the candidate’s strengths and weaknesses.”
Establishing a mentoring system is another way to ensure the associates selected will have a smooth transition.
“Having had the best mentor, I cannot say enough about the fact that anyone who wants to be the best should have a mentor,” says Bruno. “You cannot find all of the skills you need in a book, you have to experience them. Trading on someone else’s experience is therefore invaluable.”
At Kean Miller, one of the largest full-service law firms in Louisiana, and the largest in the capital region, Steve Boutwell, director of client services, also believes mentoring is key.
“Our mentoring system pairs a partner with an associate to oversee individual cases and clients,” he says. “Each case is different, but we like to have associates shadow a partner for a year so they get hands-on experience. We pair them up with a partner who is handling things they are interested in doing.”
Mentoring works exceedingly well for many law firms, making sure clients have a seamless transition of services.
“Preparing for the future is very important to our clients who want continuous service,” says Boutwell. “They want the next lawyer to have the same level of leadership as the first. We talk to the clients often and regularly to make sure the succession is successful, because we want to continue to build relationships. Relationships are very important at our firm.”
“We have had so many clients who appreciate, whether we won or lost, how the whole team fought for them,” says Lane. “They’ve appreciated the successful transition and have thanked us for doing a good job. This law firm has more than 100 years of experience, and there isn’t a situation we haven’t seen.”
Another strategy used by law firms is to offer ongoing training and involving associates into the inside workings of the firm. This strategy provides ongoing leadership training to appropriate personnel.
“We also mentor through our monthly meetings with all associates,” says Boutwell. “One or more partners will go through all of our current cases. They will also choose a legal topic, such as how to prepare for a deposition, how to manage an appeal or how to do the initial interview and then open it up for discussion. We also find it important to have associates serve on committees such as technology, marketing or facility. That way they continue to learn about the in and outs of the firm on all levels.”
Habits By Generation
With generational gaps that can extend to over 50 years, there are natural issues. Along with the diversity of these generations comes diversity in value systems, motivators and reward mechanisms. Thus, a one-size-fits-all approach to these topics may not necessarily work as well as in the past.
In a 2008 report from the University of Minnesota entitled “Generational Differences in the Workplace,” Anick Tolbize described the generations, noting that Baby Boomers, born between 1943 and 1965, “started the workaholic trend,” and believe in “paying their dues and step-by-step promotion.” They value teamwork, the chain of command, and can be technologically challenged.
The Generation X employee, born between 1968 and 1979, on the other hand, is more comfortable with technology, and are more independent and self-reliant — valuing freedom and versatility in their careers. The ability to balance career and family life is often included in their definition of success.
The Generation Y employee — also known as a millenial — born after 1981, is techno-savvy, born with an iPhone in one hand and an iPad in the other. They expect nothing less than a high level of diversity within the firm’s work force as measured by race, gender, ethnicity, sexual orientation, disability and religious beliefs. They value training and seek flexibility with their work.
“Preparing for the future is very important to our clients who want continuous service. They want the next lawyer to have the same level of leadership as the first.” – Steve Boutwell director of client services, Kean miller
“In a profession where nearly one-third of new associate hires leave their first law firm within three years, management can only benefit by understanding the impact of generational differences,” says Tolbize. “Firms must be innovative and unafraid to try new and bold approaches to managing the generations.”
The report goes on to state that organizations that acknowledge the experience of older workers and respect the talents and contribution of new workers may experience higher retention rates. Employers who accommodate their employees’ desire to balance work and personal goals may also have higher retention rates. Suggestions to achieve this goal include providing better cafeteria benefits, flexible work schedules, quality-of-life programs, on-site day care and even elder care.
Bruno understands the differences in the generation but also believes it remains important to reward the old-fashioned way.
“I try to teach them the connection between work and a dollar,” says Bruno. “Most assume that the firm grows money, and if they show up they get a piece. I try to get them to understand overhead and the connection between their work, overhead, and what they are able to take home. The associates earn a fee on all cases they refer to the firm in addition to their salary. The referral has to be the result of their own effort.”
The good news is that firms can navigate the leadership transition and change-management processes if they have focused intent. Experts believe to ensure success, law firms need to keep the topic high on their agenda. Even though a founding partner may understand the importance of developing a succession plan, it still may be hard to let go of the power over a firm he or she built from the ground up.
“The issue is not relinquishing control per se,” says Bruno. ” It is knowing that the baby is in good hands. The person who has difficulty relinquishing control never should have had it in the first place.”