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Printer FriendlyMaking a Graceful Exit: Transitioning Key Clients to the Next Generation
By Edward Poll
For partners at law firms where compensation is based on individual performance only (the so-called “eat what you kill” approach), the business development credo often leads them to refuse to share information on clients or prospects with the next-generation lawyer who might “steal” business before the first attorney is ready to step away from active practice.
The client service team concept, with the rainmaker still involved as team coordinator, is one way to avoid this problem. Another is to offer senior lawyers a buyout or capital payout in exchange for sharing clients with younger lawyers. Either way, senior lawyers would remain engaged in the business, but without the fear of financial loss. The firm and clients benefit from a planned transition.The Value of CRM
A client relationship management (CRM) database can facilitate either form of transition described above. A CRM database centralizes a firm's collective knowledge, wisdom and experience about clients and prospects, and makes it available to all authorized users.
Rainmakers’ CRM contact records can be used to develop cross-selling opportunities among younger lawyers according to an overall firm strategic plan, with opportunities targeted to individual lawyer plans. Relationship information that might have been hidden away in the retiring rainmaker’s files becomes the foundation for a smooth transition. This process facilitates the existing professional relationship and is done for the sole purpose of providing better service to that client in accordance with the client’s needs and wishes.
Making the Transition Easier
As the population ages overall, law firms need to find ways to help their senior leaders retire gracefully. Perhaps a forward-thinking firm will create an alumni club of retired partners similar to the formal alumni of associates created by some larger firms. Such mechanisms may help lawyers transition gracefully into their “second season” without facing the peril of de-equitization, and will still give them a role in the business development and referral process.
Developing the New Generation
Implicit in all this is that the younger lawyers who get this business development opportunity will be able to take advantage of it. To ensure that is the case, a firm must take positive steps to encourage associates’ business development skills.
Associates shouldn’t be made partners unless and until they have a book of business. The earlier associates begin to market, the better they will be at it. The key to business development success is building relationships with potential clients. Relationship development is a marathon, not a sprint, and it starts with the associate.
Firms should encourage associates to undertake fundamental business development activities apart from the work that partners assign to them. This can be as simple as communicating regularly with law school friends to discuss cases, clients, war stories – and develop referral sources. It can also be a more organized effort, like getting associates out into the public eye by writing articles and attending lunch or bar association functions, particularly when these things are done with established older partners.
Associates should also be encouraged to start blogging (either individually or on behalf of the firm), and to contribute to client news updates. To grow a career, irrespective of the size of the law firm or the firm's marketing activities as a whole, each associate must use such tools as these and establish the expertise necessary to put themselves before prospects and entice them to become a client.
Small Firm and Solo Issues
The issue of client transitioning is just as important in small firms and solo practices. Older lawyers in these contexts should plan for transitioning their practice well before the necessity is forced by age or ill health. Failure to plan for how clients will be taken care of as a lawyer approaches the age of retirement can, according to some authorities, be construed as reckless disregard for client welfare – a true ethical violation.
Planning options can include simply closing or selling the practice, but other options are just as viable: for example, grooming a successor by hiring an associate to learn the practice, or merging with or hiring a lateral with the option to sell the practice to him or her. The succession plan can be structured to transition over a period of years, as client responsibilities gradually transition to the new lawyer.
Life Beyond the Law
Older lawyers who continue to apply the client service lessons presumably learned throughout their careers should not automatically feel that reaching a particular age requires them to retire. However, at some point, any lawyer must confront the issue of transitioning the practice to others. The most successful transitions come as the result of thoughtful planning that smooth the path into life beyond the law.
Edward Poll (edpoll@lawbiz.com) is a certified management consultant and coach in Los Angeles who coaches attorneys and law firms on how to deliver their services more profitably. He is the author of Attorney and Law Firm Guide to the Business of Law: Planning and Operating for Survival and Growth, 2nd ed. (ABA, 2002), Collecting Your Fee: Getting Paid from Intake to Invoice (ABA, 2003) and, most recently, Selling Your Law Practice: The Profitable Exit Strategy (LawBiz, 2005).