Succession Planning for Professional Firms: Strategies for Lawyers and Accountants
Professional services firms operate in two principal fields, technical expertise and relationships. Entry into these firms has a high bar, you need qualifications, which are neither easy or quick to obtain. Therefore, suitable talent can be very hard to find at short notice and it’s not uncommon for professional services firms to have significant gaps in their workforce for a considerable period if time. Equally, client relationships are often hard won and difficult to transfer to colleagues, where trust has had to be established over a significant period of time. Whilst Fram also works across key functions such as finance and marketing, this article focuses on the people challenges specific to succession planning for those in fee earning roles.
Firstly, firms need to be aware that skills gaps can appear in organisations at short notice. Sometimes even the most outwardly satisfied colleague can surprise everyone by resigning, relocating, leaving the industry, or retiring. Unfortunately, as the pandemic taught us, as managers, we need to expect the unexpected. It’s often been the case that firms, who have a significant gap in experience levels between leaders and more junior colleagues are at far more risk, than those firms who have a multi-tiered approach to organisational structures. During challenging periods, firms naturally scale back on trainees, but some never fully address the PQE gaps that are created in teams. Also, firms with poor systems, policies and procedures are, in my view, more likely to face significant disruption by an unexpected talent gap. Where a firm has invested in strong systems, has a common operating model and language, few silos, and a strong brand, it’s often easier to cope with sudden change.
A key part of ensuring succession planning is effective is a regular skills audit staring with understanding the specific skills and competencies that relevant to the organisations goals and objectives. Where is the firm now, who does it service, how is the market changing, where do we want to be, what skills do we need today nd in the future, are all good questions to ask. Skills audits can include technical skills, soft skills, industry specific knowledge, and qualifications. Anything needed to ensure the continued success of the firm. This data can be gathered from a variety of methods, but somebody in the organisation needs to be responsible for this project and identifying any gaps (a skills gap analysis). All talent related strategic planning should take place through this lens.
In all organisations, pockets of specialist knowledge develop, often which few understand. It’s key that knowledge sharing is encouraged and whilst much of it can be done through the normal course of business, mentoring, workshops and training courses can also play an important role. As mentioned, we all know that client relationships are hard won and trust takes time to build. However, by ensuring clients have more than one point of contact, you can protect them from any potential breakdowns in service levels. How firms approach client relationship management varies, but the barriers to sharing relationships are often cultural.
Future leaders need to be nurtured. Succession planning involves identifying and developing the next generation of leaders within the firm. Identification needs to take place carefully and additional training offered, which can involve external business management qualifications. This can also help with retention and talent attraction. Knowing a firm has a structured development programme, which offers executive development programmes can be very attractive. Many lawyers and accountants are would be entrepreneurs, and many would relish the opportunity to explore strategies for practice development in more detail. Whilst these programmes can be of the face it expensive, they can often be far cheaper than replacing a talent colleague who has left for pastures new.
Often when we’re approached by firms, they need to hire yesterday. They’ve been caught off-guard, and they are losing an experienced fee earner and this will have an impact on budgets, unless they are replaced asap. Talent pipelines and a clearly articulated Employee Value Proposition (EVP) can help with this (please see our article on EVPs) Our advice is not to hide your EVP if it’s strong. You need to regularly remind the market why you’re a great firm to work for, one day a very talented person from a competitor will have a bad day and they may contact your firm looking for a new role. The creation of a talent pipeline and the setting aside of time to nurture relationships in the market is essential.
Professional service firms are talent businesses, as somebody once said “your assets go home in the evening, and you hope they return in the morning”. Developing strategies to minimise disruption in succession planning are key to continued growth.
About Fram Professionals
Fram Professionals is a specialist professional services, growth and VC-backed focused recruitment consultancy based in Bedfordshire. Originally working with clients within the university “golden triangle” region of London, Cambridge, and Oxford, we now work with clients across the UK.
Contact us on [email protected] or call 01525 864 372 for an informal chat about our services.
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