Succession planning is a proactive strategy that law firms can take to future-proof their client relationships for the long-term. But there are many factors that firms must consider when developing a succession plan, including their business structure, existing client and partner relationships and projected growth.
Without a full picture of their firm-wide dynamics, law firms risk creating a strategy that has the potential to cause friction, damage key client relationships, and negatively affect revenue.
Cultivating a forward-thinking succession mindset
One of the most important parts of developing a succession strategy and maintaining strategic account management is ensuring that your firm is proactive in its approach. This means documenting the work of their associates, nurturing the development of their best-performing advisors, facilitating processes that allow for effective knowledge transfer, and planning ahead for potential unforeseen scenarios. When firms proactively plan for the future, they help to mitigate any potential client and personnel risks that come with leadership and staff transitions. Being proactive and fostering a forward-looking organizational mindset also helps firms with contingency planning if their succession strategy experiences implementation challenges.
To ensure strategic account management and successfully plan for the future, firms should prioritize the client experience at every stage of the process. It’s not enough to speak with key advisors a few times to understand the health of client relationships. Firms should be constantly communicating with clients and leveraging objective relationship insights so their succession plans are iron-clad roadmaps for the future.
Using technology to build a leadership talent pool
A key step in developing a robust succession plan building a talent pool that firms can select from if and when key personnel leave the organization. Firms can simplify and streamline this process by leveraging client relationship technology to determine their highest earning advisors, who each of their associates are connected to externally, the strengths of those relationships, and any gaps in service delivery.
For example, a firm may utilize client insights to analyze which junior and mid-level associates its top clients are connected to. Visibility into these connections allows firms to encourage continuous engagement between clients and certain more junior or mid-level advisors, reducing the risk for client attrition when key advisors retire, resign, or get laid off.
Fostering professional and leadership development
After law firms have selected advisors for their talent pools, it’s important to invest in professional development to ensure their success as future leaders.
According to a Harvard Business Review article, firms can prepare potential successors by exposing them to a variety of managers and job positions through role rotation, bespoke assignments that require critical leadership thinking, and ‘action learning.’ The latter requires potential successors to collaborate to address a pressing topic in the market. When junior and mid-level advisors are properly trained, they’re better equipped to assume leadership roles when it comes time to implement a firm’s succession strategy.
Nurturing future activators
Encouraging activators as part of talent pipeline development is crucial for law firms aiming to cultivate future leaders who can drive growth and innovation. While investing in leadership training and educational events is essential, fostering activator behaviors among junior and mid-level advisors is equally important.
By encouraging these individuals to proactively build and nurture client relationships, seek out new business opportunities, and collaborate across teams, firms can ensure a steady pipeline of leaders who are adept at driving sustained growth and success.
The importance of leveraging data for strategic account management
Once firms have selected and developed their talent pools, it’s important to leverage client data and insights for strategic account management. Client intelligence technology provides timely and objective insights of a firm’s connections, helping identify the quantity and quality of their relationships, their most lucrative accounts, and where attrition risks and cross-selling opportunities lie.
By proactively managing key accounts and addressing client needs, law firms ensure they’re continuously prioritizing the client experience, helping to increase customer loyalty and satisfaction.
Mitigating client risk and contingency planning
By using client relationship data and insights to inform the development of a succession plan, organizations can objectively assess the health and potential trajectory of their firm-wide relationships. Understanding the full picture of firms’ client connections is essential because it helps stay on top of client needs and preemptively address any attrition risks and concerns related to staffing transitions.
Firms can also monitor relationship data to see how clients are responding to a succession plan. The results of this data can then help firms create back-up succession plans if necessary.
