Succession planning; how resilient is your firm?

The following column is by Janet Stanton, Partner, Adam Smith, Esq.

Ten years ago, the topic of succession planning was viewed like kryptonite; the mere mention caused folks’ hair to burst into flame. Fortunately, those days are (mostly) over. Many firms are acknowledging the need to look at succession planning.

A brief interlude…

Please note, there is nothing at all wrong with being a one-generation firm. The only data we’ve seen on this reports that 70% of law firms are one generation. Whether this is mostly by design or benign neglect is anyone’s guess (though, I suspect it’s the latter).

It’s only sad when a firm wants to be a multi-generational firm and fails to take the necessary actions.

So, yes, firms are more directly addressing succession planning – generally along the lines of “who’ll be the next top dog?” Certainly, who will take on the firm’s leadership is a key issue. That said, it doesn’t go far enough to ensure the firm’s sustainability.

Specifically, succession planning is about more than choosing the next head honcho – it’s about building a more resilient firm.

Why does resilience matter? For starters, it’s more than being able to bounce back from disruptions.

Resilient firms are better able to take advantage of changing market conditions, evolving client needs and emerging technologies. Research also shows that resilient firms enjoy lower personnel turnover and higher morale & engagement. All good things. In fact, resilience can be a strategic asset that provides a competitive edge.

Some of the characteristics of resilient firms include…

The degree to which the firm subscribes to and embodies the ethos of a “one-firm firm,” as opposed to providing an open platform for autonomous individuals to act as they each see fit.
Closely related to that, the degree to which membership in the firm is seen as, and does in fact involve subscribing to a “social contract” imposing mutual responsibilities on members, as opposed to an open-ended environment largely free of expectations.
The extent to which individuals at the firm embrace the notion of accountability – both to the firm and other individuals at the firm. Lawyers are often said to be allergic to accountability. It is, however, a critical element of the “social contract” as well as being a fundamental indicator of good business hygiene.
Where the firm is positioned on the spectrum from “consumption” to “investment,” or the degree to which the short term or the long term is seen as the primary lens through which to evaluate decisions.
Finally, whether the firm has a vision: Do people believe they are working for more than immediate personal return? Moreover, are folks engaged in the collaborative aspirational activity of building on the firm’s past legacy to create something more powerful and meaningful in future? This is the concept of “stewardship.”