Stop Planning for Retirement. Start Planning for Succession.

The Wall Street Journal recently reported what many of us in law firm management have known for years: senior partners aren't retiring. Large firms are responding with mandatory retirement ages, pension packages, and even consultants who help partners find a new passion after law.

That's one answer. But it assumes the goal is to get the senior partner out the door, and it's built for firms with hundreds of partners and the budget to match. It doesn't do much for the 15-lawyer firm where the founding partner's name is on the door, and he has no plans to go anywhere.

The Partner Who Doesn't Want a Second Act

Over the years, I've met plenty of lawyers who look forward to retirement. I've met just as many who don't. For them, the practice isn't a job they're waiting to leave. It's who they are.

At small and midsize firms, that's often a good thing. A senior partner's relationships, judgment, and reputation can be the firm's most valuable assets. Clients don't generally care how old their lawyer is. They care whether that lawyer knows their business and answers the phone.

This Isn't Really About Retirement

Maybe we've been framing this the wrong way. Many of today's senior partners come from a generation that saw work as purpose, identity, and legacy. A lot of them built their firms from nothing. It's no surprise they have trouble picturing life after practice.

I'm not convinced the next generation will retire the same way. Gen X and Millennial partners may not retire at all, at least not in the traditional sense. They may simply work less, work differently, or move into advisory roles. A mandatory retirement age won't mean much to a partner who plans to spend ten years gradually stepping back.

That's why firms need to stop focusing on retirement dates and start focusing on succession. Nobody needs a plan because they're turning 65. They need a plan because someday they won't be there.

What Doing Nothing Actually Costs

When a firm never addresses the question, the costs show up slowly and then all at once.

Younger partners can't grow into leadership or land bigger matters while one person holds all of it. When they get tired of waiting, they leave, and at a small firm, losing even one rising partner can take a real piece of the future with them.

Clients loyal to one lawyer are loyal only as long as that lawyer is around. Without a deliberate effort to share those relationships, there's nothing for the next generation to inherit.

Then there's the money, which is where I always end up. Say a five-partner firm earns $2 million in profit and splits it equally, $400,000 each. One senior partner has been winding down and now contributes about half of what he used to, roughly $200,000 worth of profit. He's still drawing $400,000 while he is retiring in place.

That $200,000 gap doesn't disappear. It comes out of the other four partners' pockets, about $50,000 each, or a 12.5% cut in their take-home pay. Nobody voted for that. It happened because nobody revisited the arrangement. In my experience, that kind of quiet squeeze is exactly what sends good partners looking elsewhere.

Three Legitimate Paths (and One Bad One)

When I work with firms on this, I find it helps to name the options out loud. There are really three good ones.

If They're Staying, Make It Work

For the partner who plans to practice indefinitely, a few things make the difference between an asset and a bottleneck.

First, build the role around what the partner does best now, which may not be what they did best 20 years ago. That might be rainmaking, mentoring, or handling the most complex matters, rather than managing the firm or supervising every file.

Second, tie compensation to current contribution. That one change solves most of the math problem above and relieves a lot of the tension that builds between partners when the numbers stop lining up.

Third, put a successor in the room on every key client relationship, starting now. Not when the partner slows down. Now.

Fourth, have a contingency plan for sudden death or incapacity. Who calls each client? Who takes over the files? What does the partnership agreement actually say about equity and voting? I've found that many firms have never read that section of their own agreement closely.

Start Earlier Than Feels Necessary

Most firms treat succession as an event, something that happens at a retirement party. It works much better as an ongoing strategy that starts years before anyone is thinking about leaving. Firms that wait usually end up making these decisions under pressure, after a health scare, a departure, or a client who quietly moves on.

There's personal planning, which helps an individual lawyer think through their next chapter, and there's firm planning, which keeps clients, people, and profits intact no matter what that lawyer decides. The second one tends to get neglected, and it's where we focus at CSR. For most firms, a practical plan includes:

• A written definition of the senior partner's role going forward

• A review of what the governing agreement allows for equity, voting, and retirement

• A sequence for transitioning client relationships

• A visible Path to Partnership so younger lawyers have a reason to stay

• Compensation that rewards sharing clients rather than holding onto them

• Scheduled checkpoints so the plan adjusts as circumstances change

None of this requires pushing anyone out. It simply means the firm is ready, whatever happens and whenever it happens.

If any of those made you pause, you're not alone. Most firms can't answer all five. The good news is that each one is fixable, and the firms that start now get to make these decisions on their own terms, not on a retirement date's.

About the Author:

Rick Wolf is a law firm and business consultant with over 30 years of leadership experience as COO, Executive Director, and Director of Administration. A CPA with an MBA in Finance, Rick is known as a trusted advisor helping firms improve profitability, strategy, and long-term growth.