How Smaller Law Firm Boutiques Can Design Succession Planning

The Department of Health and Human Services estimates more than 10,000 people turn 65 every day in the US. Consistent with the greater population, the generational shift buffeting large firms is also at play in smaller firms.

The impact on larger firms is just starting to surface. This issue appears more acute in smaller high-end law boutiques that, by design, have fewer layers, lower leverage, and higher-touch client relationships.

The secret formula for these dynamic firms is the alloy formed by combining the drive and vision of the founders with a group of highly skilled younger lawyers who left large firm life.

So what are next-generation partners to do if the founders decide they are ready to retire, step back, or otherwise become less involved in the firm’s day-to-day operations? And really, the question is not if, but when.

Younger partners, it’s time for you to step up and forward if you want the firm to continue to thrive. I offer a few thoughts.

Talk It Out: Assuming you already had conversations with your fellow next-generation partners abut succession at the firm, start a conversation with the founders. And if you have not spoken with your peers about what is next for the firm, it may be time to start.

Be Upfront: Boutique founders are similar in many respects to other entrepreneurs—they have a passion for what they have created and hope it will thrive well into the future. A real conversation between the founders and the next-generation partners about the future of the firm will be surprisingly engaging and fruitful.

Talk to Clients: Speaking with your clients should be elemental, yet so few firms actually do this. If your firm engages with clients outside of the case or deal work, this effort will distinguish you and the firm.

Before you start this process, be strategic both in the clients you contact and what you ask them. In the context of succession planning, you are looking for insights on why they work with the firm, what they value, and what they think could be improved. And address the succession planning issue head on when speaking with the clients.

When helping firms prepare for an in-depth client listening effort, I have read hundreds of client interview transcripts. Succession planning is consistently top of mind for clients.

It is almost a certainty that the clients will appreciate knowing the firm is being proactive about succession planning and that they are part of the discussion.

The lawyer paradox of zealously advocating for clients’ interests while studiously avoiding conflict within the four walls of the firm is very much at play when addressing the issues around succession planning.

That said, the alloy I referred to earlier can also be the basis for some heartfelt and empathic conversations about the future of the firm. The founders started the boutique for a reason and hired each of the younger lawyers carefully with an emphasis on quality over quantity, as well as a conscious knowledge of the impact on overall culture with each hire.

This means there is generally more connective tissue between lawyers in smaller firms than those of their peers at giant multi-office behemoths. This should make it easier to initiate the succession conversation, although it’s perhaps more fraught because it could transcend a cold business discussion.

It may be hard to get these conversations started. One option is to consider engaging a professional facilitator to help guide the conversation and keep it fact-based with the goal of producing an action plan.

To law firm founders reading this article, know that the thoughts around succession planning are manifest for your younger partners. You may not be ready to step off the firm you created. But you will be some day, and please know what you built is special and important and should live on well past your tenure.

But this will not happen naturally. Much like the uncomfortable questions asked during estate planning, you need to get in front of these conversations if possible.

Raising the issue openly and with good will, you may hear your younger partners quietly (or not so quietly) let out a sigh of relief. So too, your clients will be relieved knowing there is a plan for the firm and that they can continue to rely on the firm for years to come.

My sense is the future for high-end boutiques is bright. They offer a highly competitive and often preferable alternative to large firm representation.

Additionally, boutiques can help keep some of the profession’s best and brightest engaged in the active practice of law when they otherwise might simply move on from the law to something more attuned to their ambitions and lifestyle.

With the inevitable brain drain the current demographic shift represents, the profession needs a way to seed the next generation of leaders and advocates. Boutiques will pay a key role in this regeneration of the profession.

This article does not necessarily reflect the opinion of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Author Information

Murray M. Coffey, principal, M Coffey, is a former courtroom lawyer who works with high-end boutique law firms. He previously worked with large multinational AmLaw firms in business development.

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