No matter your age or stage, have a succession plan in place
By Kirsten McMahon, AdvocateDaily.com Managing Editor
It’s never too early to start thinking about succession and contingency planning within your law practice, says Toronto legal management consultant Mark Dormer.
“You really have to give yourself three to five years to execute a succession plan,” says Dormer, owner and president of Cosgrove Associates Inc. “Whether you’re winding down your practice or you’re hoping to transition and sell it, you can’t just flick a switch.
“It’s something you have to invest in and make sure that the transition of the client base is done smoothly and with goodwill,” he tells AdvocateDaily.com.
Dormer says one of the things he finds when consulting with firms is that lawyers may think about retiring or selling their practice at some point, but there’s no concrete plan in place.
Without adequate planning, he says clients could be left hanging, and the firm could experience cash-flow issues.
Dormer says that when people think about succession and contingency planning, they frequently envision winding down their practice and retiring, which is the best-case scenario.
“There are issues out of your control that can interrupt a law practice such as death, incapacitation, or family issues. Whether you are part of a firm or a sole practitioner, you want to make sure that if something does happen, there’s an action plan in place.”
In order to enable someone else to take over your professional responsibilities, Dormer says good record-keeping habits are crucial.
“If somebody has to take over your practice and your files are properly papered, that transition is much smoother. Keeping files and client lists up to date also makes it easier for someone to step in,” he says.
Staff should have access to calendars and deadlines, so they can assist whoever is taking over, Dormer says.
“Make sure that that accountability is there, so the practice has a little bit of momentum on its own. If you have a system in place to keep the files and communication open, your practice won’t grind to a stop if you’re pulled away for a period of time,” he says.
If you are part of a firm and are planning to wind down your practice, Dormer says it’s important to consider your role within the organization and how it will be filled in your absence.
“For instance, if you practice a certain type of law, are there more-junior lawyers who can fill that void? If you are a rainmaker or managing partner of a firm, that’s a big role to fill. You have to start planning those kinds of transitions well in advance.”
For lawyers practising in small firms or solo, Dormer suggests maintaining a strong network of contacts.
“Keep records of people who have referred business to you,
or lawyers you have worked with in the past. There’s value to your network, so keep it up and keep it clean,” he says.
“You never know
if someone you know would want to pick up your practice,” Dormer adds.