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                  Transition Planning

    Law Firm Transition Planning

     

    Developing an effective transition plan will not only ensure a law firm’s longevity but will also reward deserving, longtime partners for their hard work and contributions to the firm.

     

    We recommend that our clients evaluate each transition as if it were an individual transaction. We assist clients with assessing the relevant risk factors along with the creation of a buyout structure. We help our clients remove the economic disincentives for senior partner retirements, which helps increase the chances of a successful transition.

    WHO IS THIS PERSON?

    Partner within 5 years of retirement and who originates more than $500,000 annually

    5 YEARS FROM RETIREMENT

    Projected retirement time line and type of retirement (phase out to walk away)

    3 YEARS FROM RETIREMENT

    Retirement timeline is formalized and transition plan implements

    18-24 MONTHS FROM RETIREMENT

    Transition plan continues or alternate plan activated

    Considerations

    Will the firm exist after senior partner retirements?

    Is a transition possible?

    Can we create a compensation model that enables us to pay based on the value of the transitioned business?

    What is a fair value for a legal practice?

    Is the firm profitable enough to support paying a retiring partner for transitioned clients?

    How will the firm’s compensation system pay partners who are assuming a retiring partner’s business?

    Considerations

    Do we have younger who lawyers capable of retaining clients?

    Do we have the right compensation plan to motivate the next generation of leaders?

    Are we competitive enough to withstand the loss of a major producer?

    Do we have the leadership and management talent in place?

    Have we done a good job building value in the infrastructure of the firm? Is there brand value?

    Considerations

    How to get leadership ready

    How to increase profitability to allow for a smooth transition

    How to rate the competition

    When to merge

    Method for determining transition payout based on profit that is better than leaving

    Compensation design and implementation

    Considerations

    Addressing any indicated post transition issues

    Lateral/merger vetting and analysis

    Effectiveness of new leadership team

    When to merge

    Competitive threats

    More questions to be answered

    More questions to be answered

    More questions to be answered

    More questions to be answered