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Written by Norman Clark
Published: 04 August 2014
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very fragile, collapsing wooden bridge

We expect to see an unprecedented number of law firms go through their first "generational transition" of leadershi between now and the mid-2020s, as founding partners retire and the "next generation" assumes leadership of the firm. 

This will not be a smooth transition for many small and midsize law firms, especially in emerging and recently emerged legal markets in Asia, Africa, and Latin America.

In fact, a significant portion of these "first generation" firms -- perhaps as many as 30% -- will not survive more than five years after the last founding partner leaves. Even some strong, highly successful firms will struggle with their first experience at managing the profound changes that a leadership transition can produce.

Of course, having an up-to-date partnership agreement or operating agreement that is more than the minimum required for registration in your jurisdiction certainly increases probability of a cost-effective sustainable change in leadership. But it is not enough.

Even in well-managed firms, my colleagues and I frequently see succession planning and leadership transitions badly distracted, if not crippled, by subtle implications arising from the transition. These are issues that the partnership agreement might not address and that the partners might not have contemplated. For example:

 

 

 

 

 

 

 

These are not "soft" issues, nor are tangential or remote. They describe the major challenges facing major leadership transitions, even in well-managed law firms. Handling them well, or otherwise, has direct, measurable consequences.

Norman Clark

For more information about a Walker Clark Governance Review, click here.

Click here to download Succession, Retirement, and Beyond by Lisa Walker Johnson.