Succession Planning: Why solo and small law firms need succession planning

For this series of articles on law practice succession planning, I will use the terms “senior attorney” and “junior attorney.” These terms are somewhat arbitrary. But there is a need to draw this distinction. “Senior attorneys” are those closer to the issues of retirement due to their ages. “Junior attorneys” are not yet dealing with those issues, but they are looking for opportunities to develop their practices and begin to manage and lead solo and small law firms. I’m going to use the AARP definition of “senior.” I began receiving invitations to join the AARP when I was 50 years old. So, for my purposes, a “senior attorney” is age 50 and above while a “junior attorney” is under age 50.

Many Indiana attorneys consider law practice succession planning as one of their greatest challenges. In 2015, The Indiana Lawyer conducted the Practicing Law in Indiana Survey. The survey found that “38 percent of the respondents listed transition or succession planning as the greatest challenge to their organization’s viability. Only the issue of managing costs while protecting quality of legal services topped this concern.”

In this article we will look at why succession planning is needed to address this significant challenge in our law practices.

The primary reason why law practice succession planning is needed is to protect an attorney’s clients and their interests. We need to ask ourselves, “If I slow down, retire, close my office, become disabled or die, who will make sure that my clients’ legal needs are served?”

As we consider our futures, whether planned or unplanned, we must place our clients and their interests above ourselves and our interests. At the same time, both our clients’ and our interests need to be considered in law practice succession planning. It may seem overwhelming, but it is doable. As Indiana attorneys, we must work to protect, maintain and expand legal services to our clients and our Indiana communities.

Just like other “end of life” or “end of career” issues, we, as attorneys, must face reality. Our legal careers are finite. Both as a pastor and as an estate planning attorney, I have helped people face lives that are unpredictable, hard and always finite. For most of us, facing reality is hard, but necessary. The end of our legal careers is an inevitability, and we can prepare for that reality by planning.

Health problems and unexpected illness or disability can force us to plan for, at least, a temporary reprieve from practicing law. I currently am assisting a 39-year-old attorney who became disabled after being involved in two auto accidents. His doctors strongly recommended that he leave his law practice for a while, so he could better recover from his injuries. While we cannot predict the future, having a plan for the unexpected illness or disability will protect our clients and give us some peace of mind.

American demographic realities are also pushing the need for law practice succession planning. Throughout Indiana there are many “baby boomer” attorneys. There were 76 million baby boomers born in the U.S. between 1946 and 1964. In 2018, that means baby boomers are 54 to 72 years old. Many older “baby boomer” senior attorneys should be making plans to slow down and retire. They may be getting pressure from their family to do so. While younger boomer senior attorneys may be in the “sweet spot” of their legal careers, they, too, should be planning now for slowing down, retiring or making a career change. Unless succession planning is taken seriously and acted upon, it could damage our profession by disrupting services to our current and future clients.

Another reason solo and small law firms should develop succession plans is that junior attorneys are looking for law practice and management opportunities. These attorneys want to be mentored, develop their legal skills and have opportunities to lead law practices. This “upward pressure” is true with every generation. As a young attorney, I was satisfied with being mentored and learning how to be a lawyer. But as I grew in my abilities, skills and confidence, I wanted more challenges and opportunities to manage and lead. Many junior attorneys want to be active leaders in their law firms. They want to be able to enjoy their successes and make their own mistakes and learn from them, just as we did. They want to build their legal legacies, just as we have. While some junior attorneys may want to start their own practices, many may want to join and build on the legacies that senior attorneys have built.

Finally, law practice succession planning can be used to protect the jobs of loyal staff and colleagues. Even solo practitioners have staff who assist them as they provide legal services. We are small businesses with team members who depend on us to provide for them and their loved ones. We, as servant-leaders, should understand that it is not just our futures we must consider.

In my next article, we will identify some of the additional forces that are driving the need for law practice succession planning.•

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• Don Hopper is founder of Hopper Legal Consulting Services and a partner at Harrison & Moberly LLP. His focus is serving solo and small law firms in developing law practice succession plans that will continue their legal legacies in their Indiana communities. The opinions expressed are those of the author.