by Dustin A. Cole
President, Attorneys Master Class
How can you help assure that your firm will remain stable - or even continue to exist - as key partners approach retirement?
Across the country, a phenomenon labeled "Baby Boom Backlash" by Firm Advisor Dustin Cole, President of Attorneys Master Class, is causing the unexpected demise of a large number of profitable, respected and viable mid-size firms.
"The phenomenon begins at the top," says Cole
, "as firm leaders, who usually control most of the firm's clients and business origination, approach retirement age without developing specific plans for transfer of power to the next generation.
Most lawyers want to stay in practice and die at their desks, so they are in denial about having to plan for change."
According to Cole
, the so-called "backlash" occurs when the second-tier partners see this failure to plan for succession.
"They see founders gripping the reins of leadership and ownership tightly, with no efforts to groom them or anyone else as successors," says Cole
, "so they begin taking control of their own futures.
They join other firms with clearer direction, strike out on their own, or worse, leave in groups to found new firms and become the older firm's competitors."
As the best second-tier partners leave, the firm's structure increasingly assumes a figure-eight shape, says Cole
Aging but still highly productive founders remain at the top, with fewer and fewer second-tier attorneys in the middle, and a bulge of young, largely inexperienced associates at the bottom.
Although the firm continues to function profitably, the most capable successors have departed.
At this point, the firm has few options left.
As older partners depart, merger, splintering into several new firms, or dissolution are the only options.
"The great tragedy is that it didn't have to happen," says Cole
, "but when it does, everyone - including the founders - loses.
The lives of dozens of staff and attorneys whose livelihood was based on the firm are thrown into chaos.
And the founders themselves are robbed of the ability to "cash out" their ownership and the chance to continue practicing in a reduced capacity and earn income through originations."
workshop "Guiding Your Firm Successfully Through Generational Change," Cole
outlines the nine specific issues which must be addressed in effective succession planning.
identifies the warning signs that predict future crisis, the stages of crisis, and what steps are necessary at each stage to avert disaster.
For more information on Attorneys Master Class
, go to www.attorneysmasterclass.com or contact Dustin Cole
at (407) 830-9810 or via e-mail at email@example.com.