New Zealand Law Society - How succession planning can save you time, money and stress

How succession planning can save you time, money and stress

How succession planning can save you time, money and stress

Planning for the future has always been challenging, and it’s even more so this year with the threat of Covid-19 still hanging over all of us. But whilst it’s challenging it’s still critically important for any organisation or sole-practitioner to be constantly planning for the future.

Key to any plan will be supporting your greatest assets – your people. That is true of any size legal workplace, from the sole-practitioner to the large global corporates. Attracting the best people, keeping them, developing them and then preparing for when they leave is time consuming, and that’s time that isn’t generating any money.

But it’s also time that can save you significant amounts according to consultatant Emily Morrow.

“I estimate that the direct financial cost of a typical failed succession planning attempt is somewhere between $500,000 and $1 million.

“This is made up of salaries, time taken in meetings and interviews, recruitment fees, lost revenue and productivity and damage to a firm’s reputation when a hire goes badly wrong.

“Then, of course, there are the non-financial costs associated with a failed senior level hire and or promotion. These include increased office disorganisation, client dissatisfaction, stress and uncertainty that can lead to disagreements about the best way forward.”

What is succession planning?

Succession planning typically consists of promoting existing talent as well as hiring externally. It’s about preparing for those future employee movements and hiring those people who will help your organisation achieve its objectives.

“Succession planning should be a key component of any well-crafted strategic plan”, says Emily. If a firm knows where it is going, what skills it will need, understands its culture and supports its people, then optimal succession planning will be a likely outcome. This is proactive succession planning embedded in a strategic plan.

How do you go about succession planning?

Proactive, strategic succession planning starts with partners identifying the firm’s core values and articulating a clear organisational vision. It includes understanding the firm’s culture, its people, professional expertise, marketing opportunities and future direction.

“An excellent way to achieve this is for the partners or directors to set aside a day to discuss what you really want and value and what most matters for your firm going forward”, says Emily.

“Although such retreat discussions can be designed by and facilitated by a member of the firm, it can often be helpful to engage an outside facilitator. In designing and facilitating discussions of this type, I usually start the process by having confidential, one-on-one interviews with retreat participants to identify the firm’s key issues and what success for the planning process might look like.

In these interviews, partners tell me about their retirement and other plans, discuss their hopes and concerns about the firm and consider possible outcomes for the retreat discussion. I then develop an agenda for the discussion designed to encourage everyone to engage in his or her best thinking about the firm’s future.”

The next step is to have a high quality, candid and comprehensive discussion about a vision for the firm and what will need to be done to implement this vision.

“This typically is a “high-level”, conceptual discussion in which participants put aside day-to-day concerns and think big. Then we drill down into the details of implementation so participants leave the discussion knowing what needs to be done, how to achieve it, who will do what, the time frame in which to operate and benchmarks for success.

“After the retreat, firms typically have a much clearer idea of what their succession planning needs are and how to achieve these in a timely, realistic and cost-effective way.”

Key questions to consider when succession planning:

  • Will there need to be external hires?
  • Are there current employees who are high potentials within the firm and how can they best be cultivated?
  • Do some current employees not align well with the firm’s needs and how should that be handled?
  • Does the firm have appropriate management to assist the partners in implementing the strategic plan?

All of these considerations will impact the succession planning process.

“Getting this right will save you time, stress and money in the long-run.”

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