Spring 2006 issue of Horizons

INDUSTRY LAW FIRMS Law Firms Succession Planning

Don Esstman, CPA

Steven Brown, CPA

Succession planning has become a necessity for most pro- fessional service firms. Some of the reasons include the increased number of retiring founding partners and key lead- ers, the changing marketplace, evolving staffing and increased competition. Succession is not an event, but instead is a process that requires the participation of all the current owners and leaders. Why is succession planning such an important process? It is very important for law firms to include succession planning as part of the strategic plan- ning process for their survival and continued prosperity. There have been instances in which a successful firm closed its doors when the founder or key leader retired with no suc- cession plan in place. There should be a plan of action for sit- uations of this nature. A great deal of time is involved in the succession planning process. Many decisions must be made and communication is a key element. There is not a good or bad time to start a succession plan. If you have not done so, earlier is better.

a succession plan or revising an existing one: • Choose a successor to the managing partner and all major firm leaders. • Include succession planning as a critical part of the strate- gic planning process. • Have a clear understanding of the roles and responsibilities of all involved. • Pursue leadership training; it is an essential part of the process to prepare future leaders. • Take the time and make the effort to develop a succession plan. It is a high priority. Partners will have to set goals and take the necessary meas- ures to accomplish them (e.g., an action plan with deadlines). The firm must support the individuals who are undergoing the transition. These individuals should be given the time and resources to learn and develop their new roles. Keep in mind that a well thought out succession plan will help provide the firm with the leaders and resources to continue into the future. Questions? Contact either Don Esstman, Partner-in-Charge, Law Firms Services Group 314-290-3384 don.esstman@rubinbrown.com or Steve Brown, Partner-in-Charge, Tax Consulting Services Group 314-290-3326 steve.brown@rubinbrown.com.

There are some key points to keep in mind when developing

33 • spring 2006 issue