Case Study / Sucession Planning
Simple solution to an existential threat for an AmLaw 100 firm
An AmLaw 100 firm was facing a common problem these days – the wholesale retirement of Boomer partners. Unfortunately, their outdated compensation system featured “perpetual” origination credit for clients—giving partners every incentive to hoard legacy clients and resist smooth, or any, transition to next generation of relationship partners. As the majority of the firm’s key relationship partners neared retirement, the potential loss of the firm’s key client base became a critical risk.
Our task was to wean the firm off this system in a way that would help engender multi-generational teamwork.
Because the firm believed in the value of granting credit for originating new work, we advised they retain it but switch from client to matter origination credit. This change was phased in over a three-year period. With these relatively minor adjustments, relationship partners realized it was in their best interest to expose appropriate colleagues to the client in hope of generating new matters.
Additionally, working closely with the Managing Partner and Executive Committee, we helped the firm launch a firm-wide communication effort to convey the importance of the key client relationship continuity initiative. Reinforcing this, practice group leaders assigned particular individuals to be the “next generation” relationship partner for each of the firm’s key clients. Milestones were set up and accountability enforced.
Within 18 months of launching the new system, critical client relationships were on much firmer and more enduring ground. Cohesiveness increased and the morale of the younger partners soared. We are now a few years past the start of the program and client continuity has ceased to be a challenge, or even a visible issue, for the firm.