Next Generation Next Destination

NEW REPORT ON SUCCESSION AND TRANSITIONING PLANNING

I want to alert those of you concerned with these vital issues that Managing Partner Magazine's new report Transition and Succession Planning for Law Firms is now available. I provided much of the background for Part I and an article and two sidebars for Part II – the case study section.

Below is a brief overview. A full executive summary and table of contents can be found here.

Firms are facing a leadership dilemma - Quite simply, the large ‘baby-boomer’ generation is nearing retirement, and many will soon leave their firms. With this demographic phenomenon looming on the horizon, firms are faced with a situation in which much of the next generation is either unwilling or not suitably trained to take over the demanding responsibilities of leading their businesses.

If your firm fails to implement succession strategies now you may well find yourself with a leadership gap in just a few years. And what will start as an internal problem can soon escalate to a business disruption and disadvantage as your firm loses vital knowledge and the means to continue to effectively serve your clients. Rather you want the means to impress your clients with the kind of long-term thinking that protects business interests.

The report considers numerous issues including:
- The impact of generations X and Y on the practice of law in the 21st century. What does senior management need to know to ensure a smooth transition to the next generation?
- The retirement of the baby-boomer generation. What ongoing risks does this pose to a law firm’s business stability?
- The current preparedness of the younger generation to take the reins of their businesses. Do they even want to follow in the retirees’ footsteps?
- To what extent has the recession turned an ongoing succession challenge into a potential crisis, as numbers of lawyers, support staff and resources have been cut?
- What are the potential professional development and human resources solutions?
- What role can technology – and particularly Web 2.0 tools – play in addressing the succession challenge?
- And whose responsibility is succession planning anyway?

This important new report includes highly practical case studies from firms in the U.S and UK who have successfully implemented succession planning, including Weightmans LLP; Mills & Reeve LLP; Eversheds; Optim Legal; Macpherson & Kelley Lawyers; and Borden Ladner Gervais.

For more information, contact  melam@ark-group.com.

Phyllis Weiss Haserot     www.pdcounsel.com

BRAIN DRAIN: EMPLOYERS DON'T GET IT!

A MetLife study on employers' attitudes about the forecast brain drain when older (Boomer) workers retire was the subject of an Employee Benefits News editor's letter in the February issue. The findings indicate that employers are not taking it seriously yet. Here are some findings:

*   97% of those employers that said they were concerned about the brain drain haven't calculated the cost of knowledge transfer to younger employees. (Are they hoping that the problem will disappear because workers will hang on longer and longer?)

*   When ranking factors that would keep older workers around long enough to accomplish knowledge transfer, employers placed little value on creating an inviting, positive workplace culture and other benefits.

*   MetLife found that only 24% of the employers think their workers enjoy the mental stimulation of work.

*   Responses in the study indicsate that only 12% of employers believe workers wanting to maintain social contact with colleagues is an important motivation to keep working.

*   Only 5% of employers said their workers appreciate feeling needed for an assignment.

So why keep working? Employers seem to think the only important motivation is money but studies throught this decade have indicated that is not so. The intellectual stimulation and social contact with colleagues as well as feeling valued and making a difference have been reported as significant reasons to keep working by workers themselves.

Employers need to turn serious attention to the coming brain drain and knowledge transfer using the following options or others they come up with: mentoring, coaching, enhanced training, developing succession plans, and exploring phased retirement scenarios as well as making the workplace a conducive place for pursuing organizational and individual goals.

Phyllis Weiss Haserot       www.pdcounsel.com

FORECAST: TAKING SUCCESSION PLANNING SERIOUSLY

I have made it an annual rite for several years to review and give my take on the forecasts most relevant to my readers fron the Herman Trend Alert for each upcoming year. So here goes the first of four I have selected for 2010.

n      The  forecast that I hope the most becomes reality, the sooner the better because it is vital, is Increasing Attention to Succession Planning and its sidekick “succession preparation.” The longer firms put off serious preparation for the next generation to step into the big Boomer shoes the greater the danger. As  huge numbers of Boomers near the exit in their current workplace (not necessarily out of the workforce as such), the more behind the eight-ball and the less competitive firms will be as the economy picks up and competitors’ innovation accelerates. The current breather many organizations have allowed themselves during the recession will leave them gasping for air. Succession planning and preparation is needed at all times. Anyone whose expertise and contacts will be missed can cause a serious business disruption and loss of clients if quality transitions are not in the works. Remember, talented personnel can leave for numerous reasons besides retirement.

 

Phyllis Weiss Haserot          www.pdcounsel.com

GENERATION GAP FOR LEADERS

It happens every time we have a "recession" or economic turndown. But this time it is more daunting not only given the severity of the economic situation, but also given the demographic realities. The talent crunch when the economy turns up and firms are hiring again will be magnified because so many Boomers are approaching the age when they will "retire" from current positions - voluntarily or involuntarily.

In any case they may be gone. And many are managers and executives. Will there be enough people trained, experienced and ready to capably step into their shoes?

A new report from PricewaterhouseCoopers says that in 2008 over 2007, the percentage of managers and executives eligible for retirement within 5 years rose much more dramatically than it did for workers in general. (The survey covered more than 300 companies across 12 industries.)

The current recession has given organizations a breather, and many Boomers would like to keep working for a long time more, even if they can afford to retire. Surveys in 2004 and 2005, when the economy was booming and retirement funds were healthy revealed that about 80% of boomers wanted to keep working after age 65 in some capacity - reinventing retirement, as the then newly coined phrase goes.

The PricewaterhouseCoopers report as covered in the New York Times (12/27/09) contains a graph showing that about 34% of managers and 27% of executives in 2008 would be eligible for retirement in 5 years. They are closer now. The percentage for all workers was about 17%. A great opportunity for the next generation of leaders and managers, but will there be enough of them from the much smaller Generation X, and will they be ready?

Shouldn't this shake up management enough to get some serious succession planning and transitioning going at all levels?

Phyllis Weiss Haserot   www.pdcounsel.com

OPEN GEN X BOTTLENECKS WITH TRANSITIONING INCENTIVES TO BOOMERS

When the economy and investment portfolios rebound, a huge resurgence in the Boomer market is forecast, exciting the consumer marketers who are expecting the now saving Boomers to starting spending again big-time, including on things they had never needed before.

On the work front, Boomers who put their plans for "re-careering" on the shelf during the recession to hold on to what they have are expected to leave current positions for new career destinations. This is the essence of the Herman Trend Alert dated August 12, 2009.

For now the trick is to capitalize on Boomer knowledge and experience without alienating the bottlenecked Gen Xers. One answer is to pay Boomers still in place now to transition their valuable acquired wisdom, contacts and skills before they up and leave with these precious assets. That will prepare Gen Xers to thrive when the bottleneck opens their benefit, as it eventually will.

Will you or your competitors be the ones to invest and lock in these resources and be ready for the upswing?

Phyllis Weiss Haserot   www.pdcounsel.com

TRANSITIONING THROUGH CROSS-TRAINING

When I talk about flexibility, I mean more than flexible hours or location. Cross-training so that people can move from one role or specialty to another enables firms to be nimble and people to remain productive when the economy sours in their area of focus.

As we move toward the "new normal" and rethink business models, we ought to be thinking about whether individuals' roles have become over-specialized to the detriment of overall goals.

The Wall Street Journal Managing/Theory & Practice column (June 22, 2009) titled "Firms Shift Underused Workers" points out as a consolation of the economic downturn that employees are gaining new skills as they are forced or volunteer to be more versatile in order to retain their jobs. It says that this versatility is found most often in smaller firms, but there is no reason that cross-training couldn't be offered at any size firm.

A poll by the Society of Human Resource Management (SHRM) in March found that 34% of 467 human resource executives reported that their employers had retrained employees for new positions in the last six months.

I believe that's a strategy that will pay off well for organizations in any type of economy and will appeal to Generation Y/Millennials who are drawn to lattice-type careers where they are continually learning new skills and becoming more valuable to employers.

Phyllis Weiss Haserot    www.pdcounsel.com

CLIENT-CENTERED MULTI-GENERATIONAL SUCCESSION PLANNING

Survey fact: Many surveys of HR professionals have found that respondents recognize succession planning as a high priority concern.

Survey fact: Those same HR professionals admit that very little is being done to address it.

In a survey of companies in the northeast U.S. by Right Management and Practice Development Counsel (summer 2008), only approximately 9% of respondents said that a knowledge transfer process is in place. How will they survive if the creative class of Baby Boomers walks out, voluntarily or involuntarily, with their knowledge cache of skills, expertise, judgment and relationships?

What are the threats to a firm's client-centered, multi-generational succession planning?

Phyllis Weiss Haserot     www.pdcounsel.com

MUTUAL MENTORING ACROSS GENERATIONS

In these times of fear for job security at all levels and ages and the need for leaner organizations to attract and develop highly skilled and versatile workers, I suggest that individuals seek out mutual or reciprocal mentoring opportunities. Here's an example that illustrates both the benefits and the psychological dynamics to be on the alert for.

Phyllis Weiss Haserot       www.pdcounsel.com

REORIENTING SERVICE DELIVERY

At a meeting of the NY Appreciative Inquiry Special Interest Group (1/15/09), the discussion focused on using the principles of Appreciative Inquiry to improve service delivery. In the discussions, many good points that we have heard repeatedly and would be on anybody's list of what great service is were mentioned. In addition there were four characteristics that are not usually included in the definition but I think are really differentiators to consider and implement as we perform services:

*   Being OK with the client as "expert;" that is, acknowledging the inherent intelligence and "knowing-ness" of the client

*   Acknowledging the vulnerability of the client and as a result the power attached to the delivery of service

*   Providing a value-packed experience with mutual respect between provider and recipient

*   Producing experiences of expansiveness, that is resulting in expansion in some aspect - tangible or intangible

To do these things and produce the other attributes of service delivery requires really "seeing" others: how they see themselves; how they may not realize they are or their situation is; how they would like to be seen; and what changes performing the services will bring to the client.

I urge you to give these points some serious thought as you seek to continually improve service.

Phyllis Weiss Haserot      www.pdcounsel.com