Law Office Management

It’s in a firm’s best interest to begin early the process of transitioning clients of soon-to-be-retiring partners, but it has to be done without stepping on anyone’s toes.

As an avid golfer and the founder of a small suburban law firm, Ed Fleury well understands that the fairway is a good place to cultivate relationships with builders and other commercial real estate clients. If your clients are your friends and they are satisfied that you are providing a good service at the right price, he says, “they’re reluctant to go away from you, because it gets embarrassing for them.”

But Fleury has reached a point in his career where a golf game may sometimes take precedence over an Ontario Municipal Board hearing. So how can he explain this to his long-term clients, hand them off to younger lawyers, and still maintain their loyalty to his firm? This is a challenge now faced by almost any law firm, large or small, at a time when last call is approaching for a huge segment of the bar.

“It’s something that all firms are looking at seriously now. It’s a big issue,” says Ross Ellison, a senior partner at Davis LLP in Vancouver.

Larger firms have the advantage of being able to serve clients with a team of lawyers, yet a lot still turns on the personal relationship between the team leader and the general counsel or department head at the client company, says Paul Boniferro, a partner and leader of the labour and employment group at McCarthy Tétrault LLP. “While the client may have stayed with the firm for many years because they’ve worked with one particular lawyer, when that lawyer retires it’s a very good time for clients to look around and see who else is available.”

The goal for any law firm is, as Boniferro puts it, “to be in a position that, when lawyers announce that they have decided to retire, the client already has connections with other lawyers within the practice group or firm, so that their tendency is not to look elsewhere.”

But achieving this goal may require some delicate, two-way diplomacy on the part of law firm leaders. They not only have to reassure clients that nobody is giving them the brush-off. They also have to tread carefully with partners who may not be ready to think about retirement and may fear that letting go of their best clients could mean losing their stake in the game. “It’s absolutely critical to the firm’s survival, but it’s tough to fight individual behaviour,” says consultant Karen MacKay of Phoenix Legal Inc. in Toronto.

At law firms that compensate people on the basis of how much they produce, there is “obviously an inherent conflict for somebody who’s got two, three, or four years to go,” says Ellison, who maintains that the fundamental step law firms must make is to protect partners’ incomes and give them an incentive to make the transition early.

At Blake Cassels & Graydon LLP, which has a long-standing policy of mandatory retirement at age 65, together with a post-retirement allowance for partners, chairman Jim Christie says discussions are held with partners two or three years prior to retirement to reach an understanding about how clients will be transitioned and also about their compensation, “so they don’t feel that all of a sudden their compensation is going to fall off the table.” At the same time, he says, clients are contacted to find out how they would like to approach the transition and who they see as the logical successor on the Blakes team.

Yet, for many firms and many lawyers, retirement age is indeterminate. And, as Boniferro points out, you have to anticipate the possibility that some partners will opt for early retirement, while others will work beyond age 65 if they’re allowed to do so. The solution, he says, is to “start doing succession planning from day one, regardless of the age of the lawyer.” So, even if a lawyer is in his or her 40s, “we’re saying to them, ‘You have to be introducing younger (read: cheaper) lawyers to the client so we have appropriate staffing of the file.’”

This usually works for economic reasons. It makes sense to the client to have some of the work done by less highly paid junior lawyers — and, in fact, sophisticated clients will demand this. For the lawyer, it will make sense, providing it is backed up with economic incentives such as financial rewards for teamwork, delegating work, and managing client relationships.

A really small firm may not have this flexibility, especially if it doesn’t have a pool of young talent to draw upon. Norman Sims, at Sims and Co., in the rural Manitoba community of Minnedosa, is an example of a law firm leader with a good plan that he may not be able to execute.

At age 53, with retirement still a long way away, he is already thinking about how to transition clients to younger lawyers by gradually introducing the junior lawyers to the files, getting them working with clients until the client feels comfortable working with them — “and then you phase yourself out.”

The problem is that he has so far been unsuccessful in finding young lawyers who want to work in a rural practice. It’s a problem for which he has no solution other than to keep trying. And, as any lawyer in similar circumstances should note, because he is addressing this issue relatively early, he still has time on his side.

Fleury, who currently has four lawyers in his practice, says, “We’re doing transition planning all the time, up to and including getting law students on board to see if they’ll fit into our culture.” His strategy, he says, is to move files to younger lawyers and explain to clients how and why their work is being allocated.

He says he may tell clients: “Frankly, I’ve got a golf game on that day and I won’t be able to help you with your OMB hearing, because my focus is changing. However, we have another experienced lawyer in the firm who’s doing OMB work all the time and is familiar with your planner. And I’ll obviously keep an eye on the file, and if you have any questions you can call me.”

And Fleury reinforces this strategy by taking younger lawyers with him to golf tournaments and introducing them around the clubhouse. “It’s amazing how that kind of contact will pay dividends down the road,” he says.


Freelance journalist and business writer Kevin Marron can be reached at [email protected]

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