While clients are often overlooked in the process of planning for lawyers to leave law firms, those exiting lawyers can sometimes add greatly to make succession a success
Jim Pagliaro is the former Global Managing Partner in Client Relations at Morgan Lewis. His post-firm life is enviable. After leaving his firm, Pagliaro followed a lifelong passion by pursuing post-graduate studies in Art History at Oxford University, and visiting the world’s greatest art collections housed in the most renowned European museums.
Now, in addition to acting as an accredited museum docent at the Philadelphia Museum of Art (where he also serves on several curatorial committees and acts as guide coordinator for major exhibitions), Pagliaro is a frequent invited guest speaker and lecturer on art history at several universities in the Philadelphia area and southwest Florida, where he resides in winter.
Not surprisingly given his past position, he has strong opinions on how lawyer succession should be handled, and how clients should be brought into the situation.
“The great mistake most firms make is not maintaining a firm culture that institutionalizes client relationships and not making institutionalizing clients a core value of the partnership,” Pagliaro says, adding that in most law firms, partners with clients benefit from referring to clients as my client and using ownership language and practices to insure they control the relationship, which is all the better to drive compensation their way and to resist pressure to retire when the appropriate time comes.
“That is often not in the interests of the client or the firm,” Pagliaro explains. “Many firms are content to let the primary relationship go on largely unsupervised, as long as the client relationship partner generates income.”
A culture of institutionalizing client relationships
One way to instill a true culture of institutionalizing client relationships, he says, is for the firm to create a new role — Managing Partner for Client Relations (MPCR) — and ensure the professional in that role also sits on the firm’s compensation committee. The person in this new role should be charged with meeting with clients, eliciting honest feedback independently, and then exploring the full scope of each client’s needs. The MPCR should have as their main charge the job of supervising the cross-selling of the client to a broad spectrum of partners within the firm and creating client service teams, while acting as the team coach.
Importantly, it would also be their job to inspire all partners to understand that it is in every partners’ interest to expand client relationships as much as possible — even if there is a lead partner in the relationship.
“That process needs to be transparent and supported in the compensation process,” Pagliaro explains, adding that once an MPCR enters the mix, it opens the door for that individual to i) seek client feedback; ii) gather input from the client on succession; and iii) effectuate the transition of work and relationships.
Indeed, it is a culture that most firms say they want but struggle to achieve. That may be largely because firms lack discipline and follow through, and refuse to invest resources in creating infrastructure, empowering personnel, and providing support to drive true institutionalization of firm clients. Most critically, firms that are serious about creating such a culture need to back that up with a firm compensation process that reinforces the right outcomes.
Best practice for firm leaders is not to wait too long to address partner succession. A clear policy on when partners should begin to start planning for succession, which is fairly applied and religiously followed is crucial and should have the MPCR meeting with partners in the retirement zone at least three years before actual retirement. That way, this time can be used to manage the relationship, solicit input from the client, and introduce the client to more talent.
Too often, Pagliaro adds, partners don’t want to focus on this. “Good succession planning is when you allow others on the team to succeed.”
Planning for succession is critical
If a lawyer plans ahead properly, they can envision their best post-law firm life, says Pagliaro, adding that partners should ask themselves: i) how do I transition at a pace that makes sense; and ii) what is my objective for my post-law firm encore career?
That dream encore career can come in any form, and provide something that fills your life not just your time. Clearly, lawyers are used to being busy, engaged, and challenged — so they must recognize that they need to ensure their encore career presents opportunities for engagement, without the stresses of law practice.
Finally, know that there is no guarantee as to how long you will live or how many healthy years you have ahead, Pagliaro notes. “Never assume you are invincible,” he says. “Never say ‘I don’t know what I would do if I didn’t go to work.’ There is a world of activities, opportunities, and needs out there — places in which people and organizations are desperately seeking intelligent, organized, and articulate folks to help, add value, lead, and instruct. It is actually fun to find your new niche.”
This is the second part of a two-part blog series on the view of succession planning from the client side. In our last installment, we discussed the importance of keeping clients informed of changes in firms’ key partners.
