This article first appeared in Managing Partner in October 2012 under the title “It’s time to start planning for when you will step down as managing partner”
All of us like to think we are both indispensable and indestructible. It is therefore difficult for any managing partner to contemplate who might succeed him or her and when that event might happen. A recent survey by the Legal Resources Group found that for firms in the USA with more than 40 lawyers, the average number of years served by managing partners was 8.7 years, up a bit from 7.4 years, a couple of years back. There is of course no right or wrong period of tenure for any managing partner – a lot depends on the firm’s size, context and culture.
Some managing partners step down or back within a shorter time-frame than eight to nine years. I remember that when I was in charge of my firm, I had had enough after nearly eight years; and there were times during my term of office when office politics or undermining partners nearly became too much for me. Hence, my inclination is to believe that eight to ten years is about right and that it is therefore advisable for managing partners who are approaching this zone to start some succession planning, not just for the good of the firm but for the benefit of the managing partner’s own career planning.
Contemplating succession is one thing, but raising the subject within the partnership or membership is quite another. I have heard many reservations from law firm leaders about starting an open debate; the main three being “tempting providence”, “showing weakness”, and “freaking the firm out”. And yet the subject cannot be put off for ever.
I believe the best way of considering and planning for an orderly and well considered succession is to start by divorcing the system from the personalities. We are living in a fast-moving world for legal services, and the leadership structure which got the firm to its current position may not be the right sort of governance for the future. As firms have grown, they have often found that more and more decisions have needed to be made by the senior management team, and that the “job descriptions” (if indeed they have been written down) of the managing and senior partners have changed over the years. This is natural but can be dangerous unless regular stock is taken. Reports of what went on in the final years at Dewey & LeBoeuf suggest lack of decision-making transparency, a culture of secrecy, a climate of fear and a dictatorial rule at the top of the firm that probably neither accorded with the firm’s written constitution, nor met partners’ hopes and wishes. Hence an informal governance audit of lines of accountabilities, and of management roles and responsibilities, (plus an analysis of who in practice makes and implements decisions, what gets widely consulted with general partners and members, and what is left to the management team to decide) can help to establish the baseline from which the firm can make plans. The main challenge must be to decide if the firm’s de facto system of governance and risk management over the recent past is optimal for the future, or whether changes might be made. Risk management, information transparency and ownership rights are all closely related and also need to be considered – the avoidance of a potential Dewey & LeBoeuf scenario should clearly be of concern to all firms. Additionally, partners/members will naturally remain sensitive to their proper representation on important issues such as mergers, partner admissions/expulsions and significant unplanned expenditure. Nevertheless, whilst there must clearly be checks and balances, the main principle at play here is to devise the best system of governance, leadership and management that aligns with the firm’s overall strategy and is best organised to help the firm both to meet its objectives and to be as profitable as possible.
Only then – when the governance system has been decided, and after roles and responsibilities have been agreed for the so-called management C-Suite – should personalities (both internal and external) be considered. This is the stage at which the people in post can consider if the “job descriptions” for their positions still match their own styles and competences, or if the time might be approaching for them to consider stepping down. It is also the stage when the partners/members can look around and see if anyone in the firm has the potential to fill any of the management slots. Many firms also now have provisions to help former managing partners to integrate back into the firm, but that also is a subject that needs careful and sensitive discussion, and is usually best planned in terms of principles rather than personalities
The succession subject cannot be put off for ever. Succession transitions are risky, but it is the job of the firm leaders to plan the firm’s risk, contingency and scenario management and to do so in an orderly and timely manner.