Spring 2016 issue of Horizons

LAW FIRMS

Is Your Firm Doing Everything it Can to Retain its Associates? by Matt Finke, CPA, CGMA

S uccession planning in the legal marketplace is a prevalent issue that many law firm leaders are addressing. Many leaders are looking at their current associate rosters and thinking “who is going to carry on the firm’s legacy when our key leaders are gone?” Being proactive in creating partner succession plans can prevent many unfavorable scenarios related to the long- term health of a firm. It starts with how well you retain and develop current and future associates. The American Lawyer conducted its 2015 Midlevel Associates Survey and polled 4,470 midlevels from 101 firms within the AmLaw 200 and Global 100 firm rankings.

The results showed that many midlevel associates (primarily third through fifth year associates) did not know whether they would be at their current firm five years from now. When asked directly what they expect to be doing in five years, roughly 30% answered, “I don’t know.” Even more disconcerting is that only a small percentage of midlevels said they expect to be a partner at their firm in five years. Specifically, almost 8% said they expect to be an equity partner, while almost 14% said they would be a nonequity partner. In addition, Altman Weil’s 2015 Law Firms in Transition Survey determined that, in 63% of law firms, partners aged 60 or older control at least one quarter of total firm revenue, but only 31% of law firms have a formal succession planning process.

page 36 | horizons Spring 2016