Developing successful succession
planning strategies
Peter Scott
Peter Scott Consulting
Planning is key….
to developing strategies for succession
Why?
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Why do firms need to plan?
Economic pressures to reduce equity
Mandatory retirement ages falling
Lack of career paths
Loss of talent
De-skilling issues
Pension issues
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Succession planning
Needs to adequately deal with these
pressures
Part of long term career path planning
for everyone in a firm
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What should a plan aim to do?
To make optimum use of all productive
resources with the firm
Firms need to creatively think how best
to use what they have
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Aim of succession planning?
To ensure the current and future well
being of the firm by reconciling the
interests of:
Older partners
Younger partners
Managing partners
clients
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“Winding down”
“Ahh….only 5 more years to go”
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Older partners
As part of a plan towards retirement:
Make them feel valued
harness their skills and experience
Match contribution to reward
Agree financial arrangements
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Mandatory retirement age
Don’t throw out the baby with the bath
water
Should we have mandatory retirement
ages?
If so what should it be?
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Preparing for tomorrow
What to put in the place of retiring
partners?
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Does the firm have a future?
Focusing on younger partners highlights
future issues
Does the firm have the ‘people
resources’ to achieve its future
objectives / survive?
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Younger partners
Firms need to:
Provide clear career paths
Help them develop skills and experience
Ease them into client relationships
Build competitive profitability
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How profits drive restructuring
Do you in order to improve PEP…
Build underlying profitability?; or
Reduce partner numbers?
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Age related partner culling
‘Now that you are 50, tell me why you
consider you should continue to enjoy a
full profit share’
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Profitability pressures
Need to maintain partner profits
Leads to reduction in partnership size
Older partners seen as ‘easy targets’
Pressure from below
De-skilling / changes in profession
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Differentiate succession planning
from partner culling
Compare:
Partners who
- still have hunger and energy
- and are fully contributing
Partners who have taken their foot off
the accelerator
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Managing Partners
Need for career paths / parachutes
Return to fee earning?
Change of career?
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Clients
Firms forget clients at their
peril
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External investment in law firms
How will the ability of firms to take in
external investors impact on succession
planning?
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External investment to facilitate
succession?
What steps should partners planning
retirement now be taking?
Reconciling different interests?
The likely investors?
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What not to do….
“Don’t put your head in the sand”
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Develop a plan - NOW
ANY QUESTIONS?
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