Canadian Lawyer

LAW OFFICE MANAGEMENT "You can have all the fancy partnership agreements you want, with succession planning and all that type of thing, but it's just step one. Step two is trying to structure so you have the people coming up the chain." STEWART DEMMANS, CAWOOD DEMMANS BALDWIN FRIEDMAN plan, such as LawPRO, this could mean an increase in claims as baby boomer lawyers retire without a plan in place for looking after their clients and fulfilling other outstanding professional obligations. For law societies it poses an ongoing concern about access to justice, particularly in small communities, if existing practices are allowed to die when their principals retire. And, for the lawyers themselves, the absence of a viable succession plan and the failure to arrange for a caretaker or power of attorney in the event of sudden illness or death could mean a significant loss of potential income, as well as an unnecessary burden on their families, clients, and the community. What people tend to forget, says Pinnington, the former director of PracticePRO, is that there is no longer the value that there used to be in client files that might once have been sold quite easily to another lawyer, when a practice is wound up. "Twenty or 30 years ago, a filing cabinet full of wills was seen as a reasonably valuable asset and you could usually find somebody to come in and take over, loyal, there's myriad estate-planning options and properties are " he says. Now, however, clients are less often held jointly so they pass automatically to survivors without any need to renew a will. You may be lucky to get a percentage of the value you think there is in your practice and that' have done some work on preparing for the handover, he adds. So how can you ensure you have a viable plan and won't end up s only if you walking off into retirement with nothing but a set of office keys in your pocket? "Start succession planning early" is the mantra that all advis- ers recite. "You can't begin too soon," according to Jol Hunter, national lead, professional services advisory, at Grant Thornton LLP. Particularly at a small or medium-sized firm, you need to engage partners and prospective partners early on in conversations about the nature of the firm you are trying to build and what you expect from one another, thus building a succession plan from within, based on your shared goals. This plan, he says, should mesh with the goals of the younger, emerging generation of lawyers and with those of the older generation who are approaching retirement. You need to consider what options you have and which you want to pursue, adds Hunter. For example, you could set your sights on selling the practice, merging with another firm, bringing people along from inside the existing practice or recruiting young "up and comers." Of course, he adds, drafting the plan is the easy part. "The tricky bit is doing the proactive things that need to be done so everything doesn't get done at the last minute or not get done at all. Is your client ready for a newpartner? The Succession Fund™buys shares from selling shareholders in owner-operated businesses. For more information call Larry Klar, (416) 867-8090 or e-mail klar@argosypartners.com doesn't put much emphasis on all the financial arrangements that you may want to put in place and spell out in your partnership agreement. "Yes, of course we all want to minimize our tax and, yes, we want to get the bank loan right. But, if we don't get some of the other stuff right, the tax conversation or the finance conversation Even though he works for a major accounting firm, Hunter " Key strategies to successful succession planning • broaden the number of contact points with corporate clients • adjust compensation plans • work with young lawyers on business development • develop leadership skills in younger lawyers • improve and strengthen the firm's internal governance www.successionfund.com 24 JUNE 2012 www. CANADIAN Lawyermag.com ntitled-2 1 1/17/11 4:34:08 PM • build good recruiting strategies ™Argosy Partners Ltd.

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