Sweet succession – navigating the journey to a new managing partner
To strengthen rather than weaken a firm, it is crucial to put in place defined principles and processes when it comes time to appoint a new managing partner, writes Joel Barolsky.
All law firms with three or more partners must face the reality of replacing their managing partner at some point.
This can be a particularly sensitive process, especially if the incumbent has been in the role for some time, or if there are very few or, at the other extreme, several partners aiming to be the successor.
It is critical to get agreement on key principles and the process before starting your firm's succession journey.
The new managing partner will be expected to perform a particular role within a governance framework that defines his or her powers, constraints, relationships with other governance entities, budget relief and term in office.
There should be little or no ambiguity around these governance arrangements and the core expectations of the role. The new leader’s job will be quite different if the firm’s strategic direction involves rapid growth and extensive M&A activity, compared with a planned future of stability and consolidation.
The right person with broad support
In essence, firms should be looking for a successor with the right attributes for the specific role in the period ahead, AND the broad support of the partnership. At first blush, this seems obvious, but it is common for candidates to have one of these criteria, but not both.
The other implication of this principle is that the process should involve an objective assessment of each candidate’s attributes and strategic fit, as well as being consultative and democratic.
A contest without conflict
Every effort should be made to minimise politicking and cultural fallout from the process. One Sydney-based firm ran a managing partner succession process with four senior partners vying for the role. The process involved an extended period of campaigning and vote solicitation.
The three unsuccessful candidates felt that their position in the firm was untenable and left shortly after the voting period. The net result of this process was a divided and weaker firm.
Quiet and confident
There is a risk that a change in senior leadership will be viewed as a firm in crisis with a fractured and distracted partnership. The succession process should be presented to staff, clients and other stakeholders as part of the natural evolution and growth of the firm.
The process and the transition should be as seamless as possible, with sufficient lead times for everyone to get used to the change.
A five-stage process
No one set formula or succession process applies to all firms in all situations. In a small firm, selecting a new managing partner might involve one short meeting of all the equity partners. The process is usually a little more time-consuming and complex in larger firms.
The diagram below describes a five-stage succession process adopted by one large commercial law firm in Australia. The case study provides a helpful point of reference that all firms can use to tailor their approach.
In this firm, a Managing Partner Succession Steering Group (MPSSG) was set up to oversee the process, consult directly with partners and other stakeholders, identify candidates, and put forward a short list for the partners to vote on. The steering group comprised the incumbent managing partner, the firm Chair, and two other senior partners.
It was supported by a consulting firm that specialises in headhunting CEOs, objectively assessing each candidate’s “MP readiness” and identifying their leadership development needs.
There is little doubt that having an effective managing partner with broad support across the partnership is a foundation for success.
Clarity and consensus around the key principles and processes will increase your firm’s chances of finding the right person for the job.
Joel Barolsky is a leading strategy advisor, keynote speaker and workshop facilitator to law and other business advisory firms. He is a Principal of Edge International and Senior Fellow of Melbourne Law School. Visit www.barolskyadvisors.com for more details.