By Stacee Rash
As a firm owner, what is the success of the firm dependent upon when you leave? Is it dependent upon solely the client relationships you built? Or is it more dependent upon the plan you put in place to continue the firm? Recognizing the importance of succession planning puts you in the driver’s seat to set the tone and direction for the firm to propel into the future. Who should your succession plan include? We will explore the plan as it relates to staff, clients, mergers, and your family.
Select Your Team Carefully
Your future firm will be as strong as your bench strength so develop your staff and pipeline of future firm leaders. Begin now to increase accountability, improve performance pay, and restructure performance metrics. Include future firm leaders in the succession plan as they are likely your purchasers. Supporting staff will want to understand how your succession plan will affect them. Employees will transition best keeping their original work environment, policies, and features when possible.
Your clients are safe to assume that you, like them, are considering retirement one day. Think about serving clients through a team approach of experienced and less experienced staff. Introduce clients to their team and include the team in meetings, phone calls, communications, and the work load. Clients benefit from gaining confidence in someone other than you and staff benefit from getting the necessary experience to continue the client relationship into the future. So that a client isn’t discouraged by the team approach, consider discounting hours when extra people are involved. The economics pay off when the client relationship continues from year to year and staff are trained and capable for a smooth transition to continue that relationship into the future.
Perhaps your succession includes an internal plan but perhaps your succession plan includes a merger or acquisition. Merger and acquisition activity is evolving as more and more firms enter the arena looking to be acquired. The most successful mergers and acquisitions have a deal structure beneficial to both parties; avoid introducing change too quickly, address client and staff culture early in the process, have adequate workload capacity, merge technology, and keep open lines of communication. Both firms should be committed to the business plan as well as the plan to inform staff and clients.
Include Your Family
Outside your firm, you have had other partners supporting you along the way—your family. Include your family in understanding your succession plan. Your family should know who you are selling to, what your retirements plans are, when you plan to retire, where you plan to retire, and the details of your buyout arrangements. Let your family know who to contact and trust with these details should something happen to you.
Plan for Success
The firm of the future will be here sooner than you think. Protect and prepare your legacy for the future by planning and communicating with staff, clients, and your family. Succession planning is planning for success.