One of the most common events that prompts a client to leave a law firm is when a relationship partner retires or departs the firm without planned continuity of the client relationship. For instance, data shows that when clients work with multiple partners, the vast majority (90%) stay with the firm even after a partner retires or leaves the firm. Conversely, in single-partner client relationships, clients stay with the firm only 28% of the time.
Accordingly, when transitioning to the next generation, law firms often ask, how can we retain clients when the relationship partner retires or leaves the firm? At its core, this question isn’t about business succession; but about creating relationship continuity.
Instead of looking at client retention as a business problem to solve by taking a firm-centric approach, law firms should take a client-centric approach by focusing on the people involved. This will yield much better results for the firm, the attorneys involved, and—perhaps most importantly—the client.
Continuity planning focuses on the concerns of the people involved in the relationship, not just the business involved.
The attorney-client relationship relies primarily on people and intrapersonal relationships. Therefore, to address the problem of attrition when a relationship partner retires or leaves the firm, law firms need to look at the issue from the perspective of people rather than exclusively from a business perspective.
For instance, when faced with the prospect of transitioning a client to the next generation, retiring partners are often concerned with compensation (how will my income be affected?), client service (will others provide the same high level of service I do?), and relevance (what will my role be after the transition?).
From the client’s perspective, they may have worked with the retiring partner for many years and built a rapport and strong working relationship. Contrary to what many lawyers assume, the client’s primary concerns aren’t simply about competency or cost but also institutional knowledge and comfort with the new relationship.
Taking a client-centric approach fosters relationship continuity.
Here are four ways to do so:
- Take a people-first approach. By empathizing with the concerns of retiring partners and clients, law firms can facilitate continuity with a people-first approach. Law firms can do so by considering ways to incentivize retiring partners to bring new attorneys into the client relationship early, such as sharing billing credit during the transition period. Firms can also ensure that retiring partners still feel valued by helping them understand that fostering relationship continuity is financially beneficial, nurtures the client relationship, and fortifies their legacy.
- Foster trust by giving clients a long runway for the transition. Clients choose to work with lawyers (and other service providers) not only because they are intelligent and competent, but also because they like and trust them. Accordingly, with a relationship continuity approach, lawyers and firms can nurture that trust by giving clients sufficient time to get to know new lawyers on the team. Most firms think six to twelve months is adequate, but optimally the transition would happen over several years. Legal teams should intentionally foster the relationship with next-generation lawyers well before it is time for retiring partners to leave the firm. For example, the retiring partner can create leadership roles for more junior team members in specific aspects. Taking a “many leaders” approach can be beneficial to relationship continuity.
- Choose the right people – and ensure inclusivity in the process. Law firms and retiring lawyers should carefully consider who to bring into the legal team while equitably making opportunities available. Consider who would be a good fit for this particular client, who has an interest in this type of legal work, and who has the aptitude to take on this role. Starting this process early allows firms to build the right team over time in collaboration with the client.
- Consult with the client throughout the process. Clients routinely say they want to be part of the continuity process. They want to be included in discussions about the legal team, the transition process, and the knowledge transfer. In addition, the client might have generational shifts of their own, and including them in these conversations and planning with them— instead of for them—can make the transition smoother and the relationship more enduring.
Although the term “succession planning” is commonly used, we encourage law firms to reframe the issue to focus on relationship continuity. By taking a client-centric approach and focusing on the people involved in a client relationship, firms can boost client retention while also caring for the needs of the people impacted by shifts in the client team.
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