The below article appeared in the March 2012 edition of the Australasian Law Management Journal and can be found on their website here or downloaded in PDF format.

Putting the plan into succession planning

The failure to groom successors in a law firm is a recipe for disaster for both the firm and the founding partner who one day hopes to successfully exit the business, writes John Chisholm.

There is little doubt that succession is one of the most significant issues facing professional firms of all sizes and from all regions in Australia. I suspect this may be the case in the United States and the United Kingdom, too.

Recently I gave a talk entitled Succession Planning: Why Most Firms Should But Don’t outlining some of the reasons that Baby Boomers are still hanging in there and failing to consider the need to plan for the inevitable. These reasons are complex, but often include:

• Financial position: Anecdotally some partners who might have before the global financial crisis considered retiring ‘shortly’ feel they are no longer in a financial position to do so. Equally, there are other partners who have seen their incomes increase substantially over the last few years, in particular, and even the mere thought of them leaving that income behind gives them the cold sweats.

“For most of my professional life I have billed my clients in six-minute units. From the time I started out as a solicitor in the early 1980s, time billing was such an assumed part of the landscape that it barely merited discussion. Expressing reservations about it were regarded, if not as heretical, then certainly as futile.

Time billing was the way it had always been. If the system was to be abandoned, what possible alternative was there?”

David Vilensky discusses his firms transition to fixed fee pricing in his article which was published in the Law Society of Western Australia’s February edition of Brief.

The Benefits of Fixed Fee Pricing