The Seasons of Your Career: Winter, When Careers Transform
Making the right decision on career transformation allows any lawyer to reap the benefits of a thriving practice and the years-long investment of time and effort that created it.
By Ed Poll
Lawyers are not immortal. Older lawyers who continue to apply the client service lessons learned throughout the spring, summer and autumn of their careers, and who keep up with evolving professional rules and trends through professional development, should not automatically feel that reaching a particular age requires them to retire.
However, at some point every lawyer must confront the issue of transitioning the practice to others. The short sighted viewpoint is that planning to do so is more bother than it is worth, and that the better course to stay in practice and “die with your boots on.” A planned sale or transition of a practice is far preferable, because it allows lawyers to transform their lives toward enjoying the fruits of their labor as they choose. That’s the kind of wisdom that comes with age, in the winter of a career.
Earlier this year, the newsletter of the Ontario Bar Association’s Sole, Small Firm and General Practice Section gave commentary from lawyers who have sold firms several times, and from accountants and advisors who have helped them do so. They all agreed that, with proper planning, a practice sale is a viable alternative for lawyers.
Even the smallest and most personal practices can be saleable for the right price and under the right terms, provided that all ethical requirements are met. The issue is not one of feasibility so much as it is personal choice. The focus should be on personal satisfaction, self-worth and well-being, depending on the type of practice and the lawyer’s relationship to it.
In some larger firms, a career’s winter season has until recently been predictable. The older lawyer simply received the designation of “special counsel” or “emeritus partner,” and another lawyer in the firm took over the client list. But even before the recent recession, this process was changing. Older lawyers have increasingly tended to oppose mandatory retirement ages. Firms, meanwhile, have increasingly tended to ease or force out older partners seen as no longer carrying their billable-hour weight.
The middle ground here is that many big-firm lawyers in the winter career season no longer (if they ever did) want to be responsible for rainmaking. Yet for older partners at law firms where compensation is based on individual performance only, the business development credo often seems to force them into refusing to share information on clients or prospects with the next-generation lawyer who might “steal” business before the first lawyer is ready to step away from active practice. The client service team concept, with the rainmaker still involved as team coordinator, is one way to avoid this problem. Another is to offer senior lawyers a buyout or capital payout in exchange for sharing clients with younger lawyers. Either way, senior lawyers would remain engaged in the business without the fear of financial loss while the firm and clients benefit from a planned transition. Firms can even create an alumni club of older or retired partners and have found these groups are good networking and referral sources for future business.
The issues are different for lawyers in smaller firms or solo practices. Older lawyers in these contexts should plan for transitioning their practice well before the necessity is forced by regulations, age or ill health. Selling a law practice to another qualified lawyer can alleviate a host of problems. Not only do the buying and selling lawyers benefit, but the clients also benefit when they are smoothly transitioned to receive competent representation from a qualified buyer.
If the practice is not sold or closed, the best alternative is grooming a successor brought on board as an associate or a lateral partner. Ideally the succession plan can be structured to transition over a period of up to five years, as client responsibilities gradually transition to the new lawyer. These five years can be seen as the “red zone” of the senior lawyer’s career – the area right before reaching the goal line of retirement. During this period the lawyer can identify a successor, have ongoing conversations with key clients about the upcoming transition, forge new ties between the successor and both current and new contacts at the client, and ensure that the new lawyer is completely up to speed on what the client needs and expects.
Either the sale of a practice or transition to a younger successor is the best way to avoid one of the most insidious aging problems in a small firm. This is the danger that aging lawyers or lawyers committed to closing their practices may emotionally leave their clients long before they close their doors. This can result in less effective representation well before the lawyer retires. A related problem is that such lawyers may also be behind the curve technologically – whether by not having kept their office technology current, or even to the point of not using email or not keeping electronic files of client records. Whether through disinterest or obsolescence, such aging lawyers are failing to meet the necessary standard of care.
Ultimately, however, the real standard of care to be met by a lawyer in career winter is to care for yourself. What are your personal goals for life in this season? Can they be achieved without leaving the practice of law? If not, what personal objectives should you set for a new life outside of legal practice? Leaving a career as a lawyer by retiring is an emotional process. You must want to do so, and a successful transition will require all the traits that defined your success as a lawyer: motivation, acceptance of risk, resiliency and commitment. Each person’s approach is unique, and can change over time. Making a decision does not have to mean that you’ve burned bridges to your past life, or that you have erected a wall against more change in the future.
Assess the reality of your financial resources and your physical health. Consider whether there is an estate plan to estimate and minimize estate tax liability exposure, create trusts to conserve assets and minimize tax impact, and properly value the practice for estate tax purposes. As they say in the airline business, put your oxygen mask on first, before trying to do anything else.
Assuming you’ve made all the appropriate plans and preparations, from lining up a successor to crafting an effective estate plan, only you can decide how to make your transition. The answers are certainly different for every individual; but you won’t begin to learn them until you ask yourself the right questions.
Whenever there is a failure to plan for practice transformation possibilities, fear of the unknown is often the driver. Lawyers experiencing this kind of fear should remember that whenever there is change, there is also opportunity. Pinch yourself, do meditation or find some other mechanism to stay free of stress to be able to see those opportunities. They do abound. We just need to “stay above the noise,” be patient and observant – the traits every lawyer learned in law school. After winter, spring comes again, with a promise of growth and transformation for those who are ready.
The Seasons of Your Career:
Part 1, When Careers Take Root
Part 2, When Careers Grow Fastest
Part 3, When Careers Mature
Edward Poll, J.D., M.B.A., CMC, a law practice management thought leader and contributor to CBA PracticeLink, recently completed a national tour to speak to bar associations and law schools. Ed’s extensive background in business and law have made him one of the nation’s most sought-after experts in law practice management.
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