Stringam Law's CEO on governance gaps, compensation disputes and the cost of a rushed transition
Succession planning at small and medium law firms is widely discussed, but improvements in the industry have been marginal, according to Kurt Schlachter, chief executive officer of Stringam Law. He will speak about this topic at the Canadian Legal Summit in Toronto this October.
"It comes up almost universally, and I would say there's obvious awareness of it, and I think maybe some marginal improvement and strategy around it, but not…not enough, as far as what I…would like to see industry-wide," he says, adding that meaningful action tends to be put aside on busy calendars.
The delay is partly structural and partly psychological. “It's a lot like estate planning for yourself," he says. "It's one of those things that's easy to put off because it seems like you have lots of time." For senior partners whose professional identity is tightly wound up in their practice, thinking clearly about how to wind it down requires a level of detachment most find hard to muster. This is not a problem restricted to the legal profession. Only one in 10 Canadian business owners has a formal succession plan in place, according to the Chartered Professional Accountants of Canada.
The client's problem is not solved early enough
The most persistent failure Schlachter sees is firms leaving client relationships unattended until a retirement is already under way. Firms can structure equity, standardize exit policies, and develop successors – none of that compels a long-standing client to stay when their trusted lawyer walks out the door.
"I think the clients need to be taken along in the conversation about what is happening," he says, and that conversation must start well before any exit announcement. Stringam prioritizes identifying successor lawyers who are not flight risks and are genuinely invested in the firm's future, bringing them into key client relationships gradually. By the time a partner exits, the client has already built comfort with whoever is taking over, which is considerably easier than managing a three-month handoff cold.
The approach also varies by practice area, because the relationships at stake are not the same. Business law turns on maintaining specific client connections; family law is more about preserving the firm's reputation for competence with a constantly changing client base; real estate hinges on keeping the confidence of referral sources. Stringam has standardized exit policies for partner transitions across its Western Canada network, but applying them still requires judgment about the individuals, the practice, and the geography. The Law Society of Ontario now requires lawyers in private practice to have written client contingency plans confirmed in their annual filings, which reinforces why early preparation is not optional.
Why governance failures become succession disasters
Structural gaps reveal themselves early, often before anyone at a firm is thinking about succession at all. Schlachter recounts learning about a firm of decent size and solid regional reputation that had never drawn up a formal partnership agreement. "I almost fell off my chair," he says. "I've never heard of such a thing." His advice to any two-lawyer partnership: Do now what those same lawyers would advise a business client forming a partnership – put the structure in place from the start, covering compensation, authority, and what happens when someone wants out.
Stringam has operated with formal governance throughout its growth from roughly 20 people when Schlachter joined the partnership to north of 250 today, a trajectory detailed in his 2024 Canadian Lawyer profile on Stringam's strategic expansion. When he moved into the CEO role in 2023, one of his priorities was to introduce a tiered partnership model to address a structural gap. Previously, the only option was a full equity partnership, with no intermediate stage. The firm now has income and equity tiers, with a deliberate distinction from how similar models work elsewhere. "I didn't believe in the model where it's really just a title," he says – income partners at Stringam carry real investment in the firm and have meaningful input into its direction, rather than simply being given the designation. He describes it as "a vehicle for vertical career progression": a stepping stone for rising associates not quite ready for full equity, and a step-down option for partners winding down without leaving the ownership structure entirely.
Compensation is where succession plans break
If governance sets the structural conditions for a functioning firm, compensation is where successions most often collapse. Most firm catastrophes, in Schlachter's experience, trace back to partners who feel their contributions are not being valued – and that feeling almost always involves money. His model accounts for leadership contributions alongside revenue generation and treats the compensation structure as something to refine over time rather than set in stone. The willingness to have direct, uncomfortable conversations and make structural changes when needed is what separates firms that navigate transitions from those that implode during one.
Identifying future firm leaders is a related challenge that Schlachter approaches through structure rather than selection: elected board positions, ad hoc working groups, and regional lead partner roles all create space for people to step forward. "Typically, leaders…emerge. They are not anointed," he says. The same directness applies when he advises a firm approaching succession from scratch. "I think it comes down to being…candid. Okay, this is a great opportunity for you. I am only going to be here for so many years. I want you to take this over from me. Rather than being vague about it, be direct," he says.
For a firm considering a sale or merger, the timeline carries real financial weight. A firm with five to 10 years of runway and a structured plan in place commands genuine value; one that arrives at the last minute with nothing in order does not. "I'm [going to] say, well, maybe, but what's to buy?" he says.
Schlachter will bring these questions to the Canadian Legal Summit in Toronto on October 14, where he will join a panel on succession planning for small and medium law firms.
This article is based on an episode of CL Talk, which can also be found here:
The episode is also available on our CL Talk podcast homepage, which includes links to follow CL Talk on all the major podcast providers.
