Succession & Exit Plans for Law Firms
The development of a succession plan is an important element of law firm management and control. Too many firms face negative repercussions of failing to address the issues that arise from not having partners or future partners that have the desire and ability to take the firm forward.
The result of not planning for the retirement and exit of existing partners can render firms closing or being acquired by other firms for little or no value.
Not having a plan for the future of the firm is a regulatory risk as failure to address this issue can cause damage to not only the firm itself but the staff and clients. Approaching the exit of partners and addressing retirement plans should be linked to the development and promotion of new Partners and potential equity Partners. A succession and exit plan will dovetail the exit plans of existing Partners with those of future Partners and through doing so deliver a robust succession plan that protects the firm and its value.
The Strategic Partner work with firms to develop succession and exit plans that achieve the goals of the current partners.
Our work will also extend to training and mentoring of future Partners and provide them with the confidence and skill sets required to become an equity partner and decision maker. For more details on our Future Partner and training and mentoring programme, click here to view our service.
With the legal market struggling to find Solicitors willing to step up to Equity status this is an important area for firms to address and consider to sustain their own future. A successful succession and exit strategy will include:
- Identifying the plans of the current partners and when they intend to retire or reduce their activity
- Address what would happen in the event of a sudden and unexpected exit
- Provide future Partners with a path to Equity and clearly setting out the firm’s expectation and requirements of future Partners
- Considering finance options if there is a need to ‘buy into’ the Equity
- A Plan to address the financial consideration of an exiting partner and if and how they will release their own capital
- Identification of future Partners and ensuring they are trained and ready for Partnership status and the responsibilities that it brings
- Updating the Partnership of Shareholders agreement to protect both existing and new Partners
- Consider and address the impact on the firm, its clients, and staff of an existing partner and in particular address client relationships or skills that could be lost as a result of a partner leaving.
Additional Compliance Services
For further details on each of the other compliance services we provide please click on the links below:
Codes of Conduct inc COLP & COFA
Firm and File Audits
New Law Firm and ABS Applications
Compliance Management Service
Compliance Administration Service
Professional Indemnity & Renewals
Office Manual (inc quality kitemarks)
Drafting and Documents
Training and Development
Partnership & Shareholder Agreements
Succession & Exit
Closure of a Law Firm
Data Protection & GDPR
For more information about our Regulation and Compliance service you can call us on 0203 911 9710 or you can email us at email@example.com.