What has Technology got to do with Law Firm Succession?
In insight / By Charlotte Tobulevicius / 04 October 2019
With an ageing workforce and struggles with talent retention, succession planning should be top of the agenda for law firms; but many are still choosing to ignore this inevitable business factor and instead focus on other areas of business, such as technology investment.
PWC’s 2018 annual law firm survey reported that technology was a key challenge facing the legal sector over the period from 2018 to 2020, with the shortage/retention of talent also being uncovered as a key obstacle.
It’s not enough for law firms to simply point out that they are facing these challenges, they need to proactively plan for how they are going to overcome them to make the firm more attractive, and succession is no exception.
So, what if law firms could merge these problems together and successfully plan for the future by using technology, whilst also addressing the shortage of talent and therefore benefitting succession planning?
Investing in Technology
Technology investment can be a big outlay, but the plethora of benefits that come with it definitely outweigh the initial cost and can often save more money in the long term.
Partners will often balk at the thought of spending huge amounts of money on technology, especially if they are close to retirement. However, they must remember that if they invest in the right technology, this could positively impact the bottom line and ensure that the firm appeals to prospective successors.
Firms will need to take stock of their business and assess what their needs are before deciding on what technology they should invest in. Several important questions should be asked:
If I had my time again, would I be investing in this law firm and if not, why not?
Is security an issue and should internal processes be changed to support this?
Is the firm implementing a remote working strategy that requires users to be able to work from any location, securely?
Does the business need help with automation for mundane tasks that could free up fee-earners?
Is data a worry and is the firm protecting the data of its clients as best it can?
By answering these questions, a firm will know which areas of technology should be prioritised and if still in doubt, should seek advice from an IT specialist to assess where changes could be made to benefit the firm in terms of staff retention, cost saving and succession planning.
The need for managed IT and cloud services is only going to increase, with the ever-growing requirement for firms to provide flexible working opportunities and the growing amounts of traditional paperwork going digital. By investing now, companies have the opportunity to get their business in a more desirable position for investors, which also gives them an edge over their competitors and can help with cost saving.
Attracting and Retaining Staff
Using technology to get the firm and its processes in tip-top shape makes the business much more appealing to both current employees and prospective talent – especially for millennials – and there are future leaders both inside and outside the company waiting to be developed into business savvy partners!
“The better the talent… the better the firm, the client’s and the firm’s reputation.”
Partners leave a legacy behind when they leave their firm and therefore, succession planning should be taken seriously to ensure that only the best personnel will be in with a chance of securing the top job.
By not planning for succession and leaving a firm’s legacy to chance, partners run the risk of damaging client relationships or even losing clients altogether, as well as potentially losing talented staff – not attractive to prospective replacements.
Aside from recruiting new talent, a big part of succession planning is employee engagement and keeping talented fee-earners engaged and on board, therefore partners need to ensure they have clear progression paths laid out. The good news is, they can use technology to do this too.
Using Technology for Employee Engagement
There are several hundred software solutions available to help with future planning, enabling businesses to make the succession strategy much simpler and stronger. By investing in performance management systems and data intelligence, firms can focus on growing and nurturing fee-earners towards greater professional expertise which can ready them for an eventual takeover, should they wish to pursue this path.
Not only does this software help to determine who would be a good fit for succession, but it can help with attracting and retaining talent. By having the ability to recognise and reward good performance, firms can make sure that fee-earners feel appreciated and likely to stay with the business for a longer period.
Firms can even use software to create progression plans which intelligently track employees and newcomers over a defined period to assess whether they would be a good fit to take the reins at succession. This ensures that everyone has job clarity and can benefit from opportunities for growth, which in turn increases productivity and improves profitability for the business.
By planning for succession early, partners can ensure that they have enough time to identify a potential successor and can then spend as much time as possible with that person to knowledge-share and feel confident that they are the right person for the job.
Early planning is also good from a client perspective as partners can communicate plans to the client early, reassuring them that the relationship they have spent years building and maintaining is front of mind and will be looked after.
Allowing plenty of time to find the right person to take over the firm is only ever going to be a benefit and using technology to support this journey will make it a much simpler and streamlined process. By having visibility of the whole business through technology, partners put themselves in a much stronger position to be able to leave their firm in capable hands.