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Why partner retirement planning is essential for law firms

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Partner retirement can be a thorny issue to discuss at the best of times. With its connotations of old age and finality, it’s not a topic that partners and firms are eager to bring up, especially in a sector with as much career pride as law.

But by not taking the time to properly plan for retirement and partner succession, firms risk seeing an unpleasant end to what had previously been a long, valuable and positive relationship.

It’s a situation well known to Ingrid Van Berkel, a former co-managing partner at Everseds-Sutherland’s Dutch offices, now a TPC Leadership executive coach and facilitator, and to TPCL managing partner Annelieke Jense. We sat down with them to get their perspective on why law firms need to prioritise their retirement planning.

Retirement doesn’t have to be a taboo

One of the biggest hurdles in planning for retirement and succession can be just discussing it in the first place. “It’s a taboo topic to talk about,” Ingrid says. “Depending on the firm there might be provisions for a mandatory retirement age, but in all the years before then there is often no conversation at all.”

It’s easy to see why retirement can be an uncomfortable discussion. Lawyers often live for their work, and no young partner wants to be reminded of that future day when they’ll have to stop practicing. And with firms that have a mandatory retirement age, partners can often feel like they’re being shown out before they’re ready to stop.

“How different could it be if retirement was something to celebrate?” says Annelieke. “As the start of something new, an acknowledgement of a successful career and a chance to be thanked for contributions to the firm. But something needs to happen to accomplish this – foremost to normalise the conversations around it long before the actual key life event.”

Some measures for solving the above are actually very simple. TPC Leadership led a round table with managing partners from a number of international law firms, and one of the points that came up was the importance of relating to your partners and getting to know them better.

“What are their hopes and interests? What are their plans for the future? What really matters to them?” says Annelieke.

“Because if you know this, you can draft an exit together that fits the person and might include a win-win situation and – we would argue- will happen in a totally different tone, mindset and atmosphere. ”

Succession means safeguarding the firm

When those conversations don’t happen, and the path to retirement is not institutionalised nor normalised, retirement can become a sudden and painful process. Lawyers are hard-working and devoted to their practice but the flipside is that they don’t have a lot of time to spend self-reflecting on their next steps. So when retirement comes at the end of a long career, it can feel like a bolt out of the blue.

Not only is that distressing for the retiring partner, it’s usually damaging for the firm as well. Exits are often painful rather than amicable. And when partners leave on those terms, that’s when it becomes a competitive process and some lawyers will look to take their clients with them.

“Poor succession planning drives the tendency to be really protective,” Annelieke says. “They think, ‘My clients, my dossier,’ and that’s a financial risk for the company. You want people to leave happily, keeping important clients in the firm.”

Succession isn’t just about keeping hold of clients, though. It’s about making sure the firm and the team that stays behind is in good shape for the future. Retiring partners have a key role to play in that. They’ve spent their life practicing the law and their expertise is the perfect springboard for creating new, young partners.

“Every partner who retires should take care of their own succession and their legacy,” Ingrid says. “Whether they’re retiring because of age or another reason, they should be working with their team and the firm for a couple of years before that to make it a smooth process.”

And that work can continue even after they’ve left. There are few greater ambassadors for your firm than esteemed former partners. Taking the time to make sure their retirement is peaceful and pain-free can set you up with an alumni network that speaks highly of your firm, both to potential clients and lawyers who want to join you.

It’s not just business, it’s the right thing to do

There are plenty of financial and business benefits to properly planning for succession. But while those hard numbers mean a lot in the legal profession, it’s just as important to remember that retirement is a human issue before it’s a business one.

After all, a partner has devoted the best part of their life to building up and co-managing their firm. It’s only right that their contribution should be valued and their commitment paid back with a smooth retirement.

“Why do we need a business rationale?” asks Annelieke. “We’re talking about human beings who have invested all of their energy, knowledge and personal sacrifices into your firm. Isn’t it the decent thing to make sure they leave happily and appreciated?”

It would be fair to say that this also applies to the other way around too. The firm has provided the opportunity and surroundings to have a fantastic career with intellectuel, identity and financial benefits. Would it not be favorable to ensure one’s leaving ensures the maximum handover for the future success of what you have helped to build up?

Looking to make an impact in your department or firm? Get in touch to find out how TPCL can help.

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