The second in a series of articles on the everyday challenges facing managing partners.
While it is tempting for any law firm managing partner to believe they can go on running things forever, this is not realistic. The question of when they should step down and hand over the reins is important. There should not be any stigma around the decision. It is a natural step in the career cycle, sitting alongside a lawyer’s very first day in the office.
A more pressing question (one that is thought about even less) is not when to resign, but rather how.
When I became managing partner at Harold Benjamin, I was fortunate enough to have received my handover from an outgoing managing partner who was very clear about the objectives of his retirement – a precise, immediate and all-encompassing transfer of his power. There was no hanging about or pulling strings behind the scenes. I had control of the firm from day one. While the prospect of running a firm independently was daunting and scary, I eventually found that taking control straight away was the bedrock of a successful succession.
Being left to make decisions and focus on the firm was, without doubt, one of the main drivers of success. My time learning from my predecessor was also crucial to shaping me as a leader, as I took the knowledge I acquired from him into my new senior position. While my style was very different compared with that of my predecessor, one fundamentally important similarity remained: strong financial control. For any business, cash and cashflow are two of the most important things; without cash, a business cannot operate. For this reason, it is vital that, beyond all else, any new managing partner is able to make decisions about anything and everything relating to the finances.
When I took over, I put all my efforts into two big projects: relocation to new offices, and leading an internal discussion about the conversion from a partnership to a limited company structure. Any new leader needs to have some kind of vision and be willing to work towards that vision from day one. Usually it is not enough to simply ‘slip’ into the role and keep running things as business as usual. You need to work to make an impact, be heard, remembered and respected.
While succession-planning is not something on many senior partners’ agenda, it is an absolute necessity, like any other future planning for a successful business. Many firms approach this too late, which can cause serious issues later down the line. In ageing partnerships, the bright team of individuals who have been promised for years that they are the future of the firm get despondent and leave.
Having a clear map for the future, and being transparent with your team about your visions for what the future holds, are vital for ensuring staff feel secure and can see opportunities for their growth. It gives everybody a clear future to work towards. There is also the obvious risk-mitigation element to succession-planning. As with anything in law, it is vital to think ahead and plan accordingly for any eventuality in case things go wrong.
Planning and striving for the growth and development of a firm during one’s term as managing partner is just as important as creating and building a successful group of future leaders in the business after one’s retirement. Building that second tier of future leaders is an easier task than it seems. The important thing is to look back at what drove and motivated you in your early career – a sense of belonging, future ownership, and a business that you can call your own. Managing partners should draw on personal experiences and incorporate that into their business succession-planning.
The role of a leader is to create future leaders, not stop them, and succession must be seen as a clear path, not one riddled with difficulty and hardships. It is the responsibility of predecessors to plan for smooth transitions of power and, when the time comes, hand over the reins and trust in the chosen successor.
When the day comes for me to step down as managing partner, I will give way to my successor’s new ideas, energy, and focus, and will – like my predecessor – exit without interference with the future leader.
Whatever stage your business and your own life are at, it is never too early to plan for the succession of your business. Plan ahead and, most importantly, be willing to let go!
Vijay Parikh is managing partner of Harold Benjamin, London
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