Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the solo owner of a six attorney insurance defense firm in Phoenix. The other five attorneys are associates - most of whom have been with me three years or less and had limited experience prior to joining my firm. I am 47 and am looking to start to wind down within five years and be totally out of the practice in 10 years when I am 57. I want to start thinking about my succession strategy early so I have time to execute it properly. I would appreciate your suggestions.

A. If you are like most small insurance defense firms, you have a handful of insurance companies that send you virtually all of your cases. I assume that you bring in all the business, hold the key to the client relationships, and guard those relationships carefully. This may be a double-edged sword. By controlling those relationships and using your associates as "worker bees" to keep them from getting close and stealing your clients, you also prevent them from developing in the eyes of your clients and that could constrain an internal succession/exit strategy down the road. Ask yourself this question - if you made a couple of deserving associates partners today and you left the firm next year would any of the clients stay? Often in situations similar to yours I am told none would stay. If this is the case you need to begin to hire the right associates - ones that actually want to become partners someday (not all do) and bulk up the team that you have. Otherwise, you may have to bring in lateral talent at the right time or merge with another firm.

Unlike many law firms we are working with you are starting to think about this early - so you have time.

Good luck!

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John W. Olmstead, MBA, Ph.D, CMC,(www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com