webinar transition management - jan 2015

The Legal Connection

Transition Planning for Attorneys

Lunch-n-Learn webinar

January 7, 2015

@12:30 PM ET

Stephen Gallagher, MSOD Principal,

LeadershipCoach www.leadershipcoach.us [email protected]

1Transition Planning

http://www.leadershipcoach.us/

Stephen P. Gallagher

Transition Planning 2

The Aging of the Workforce

and why care?


Aging of the Workforce

The number of people age 65+ will more than double, increasing from 13% of total population in 2010 to 21% of total in 2050.

THE AGING US WORKFORCEA Chartbook of Demographic Shifts

Stanford Center on LongevityJuly 2013


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Four Stages of Aging

• 65 – 74 Young old

• 75 – 84 Middle old

• 85 – 94 Old old

• 95+ Frail old

Transition Planning

Aging of the Workforce

More than a quarter of all Americans and two out of every three older Americans have multiple chronic conditions, and treatment for this population accounts for 66% of the country’s health care budget.

The State of Aging and Health in America 2013


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Retirement

The traditional meaning of retirement has been a single event – “withdrawal” from an office or active service; to seek privacy or seclusion.”

Webster’s Dictionary

Transition Planning

Structuring a Retirement Plan for Senior Lawyers

• Research shows that most people spend more time planning for a two-week vacation than for their retirement.

• While financial planning is important, it’s just as important to think about all the other aspects of life that are impacted by retirement.

• How to handle changing relationships with family and friends, or the desire for personal development and growth?


WHO SHOULD BEGIN THIS JOURNEY ?

How do you transition away from full-time law practice – possibly

towards full retirement?


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New Thinking About Retirement Planning

• Many lawyers who are reaching towards the final stages of their careers do not necessarily wish to hang up their briefcases and leave the law.

• You need to begin thinking of retirement as a series of developmental steps taken over a period of time.

• There are no set formulas for developing a Transition Plan.

Transition Planning

Transition

Transition is the inner process through which people come to terms with a change. The process takes place over a period of time as they let go of the way things used to be and reorient themselves to the way that things are now.

William Bridges, author of “Managing Transition: Making the Most of Change”


Transition

ENDING - Letting go of the old ways.

NEUTRAL - Going through an in-between time when the old is going but the new is not fully operational.

NEW BEGINNING - This is when people develop the new identity, experience the new energy, and discover the new sense of purpose.


Endings, Neutral Zone and New Beginnings


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Transition/Succession Planning

• Could it be that the same senior partners that many firms are now looking to sunset may become the untapped resources firms will need to lead the talent pool of the future?

Transition Planning

Who is in our Virtual Room?


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William McArthur - Founding Partner – Age 74

• Great Rainmaker in his day.• Tends to promise more than the

firm can deliver.• People he works with are

growing concerned about his health and his billable hours.

• He has been known to fall asleep in client meetings.

• Promises to live forever.

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Richard Bart- Founding Partner – Age 70

• Has never really kept time. • Prefers working alone.• Richard has driven many

associates out the door over the years.

• His one partner, Stephen Cave has accused him of retiring 10-years ago, without telling anyone.

• Promises to live forever.

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Stephen Cave – Founding Partner – Age 68

• Richard Bart’s partner and his brother-in-law.

• Always involves associates in client meetings.

• Strong billable hours, but he would like to transition away from full-time practice.

• His greatest fear is that the firm would fold if he stepped away – probably true!

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Al the Partner – Lateral Hire – Age 80

• Comes to the office for several hours one or two days a week.

• Was highly regarded in his area of practice.

• Very involved in community activities.

• Has not planned well financially for retirement

• Has few outside interests

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James Smith – 58 year old – Partner

• Has aging parents who live in Ontario – their health is starting to deteriorate

• Feeling sandwiched• Has a spouse who has just

retired and wants to travel• Doesn’t want to retire

completely, but wants to work fewer hours and be able to take blocks of time off

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Duke of Hamilton – Partner 10 Years

• Appears to be the logical next choice to run the Firm.

• Has absolutely no interest in administrative affairs of the Firm.

• Currently experiencing difficulties in his personal life.

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Mary – Partner Eight Years Has Other Interests Outside the Law

• Has a growing book of business.

• Commits considerable time to charity work.

• Hoping to qualify for the Nova Scotia Women's Keelboat Championship Team

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Sue – Partner 4-Years

• Talented young partner who has two children in second grade and kindergarten.

• One of her goals this year is to be appointed to the Compensation Committee.

• Believes in mandatory retirement for all senior partners at age 65.

• Plans to amass a fortune by age 50, so she can retire early.

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Let’s agree on what Transition Planning Should be

• be the beginning of something different. • hold new prospects of growth for each of

us. • be approached as a new journey taking

place over a period of time.• be set in motion way before you intend to

use it.• be shared with family, friends and

business partners.

Transition Planning

Let the Journey Begin

One of my goals for us today is to convince you to commit to start a transition plan for yourself that would include setting specific action goals that you can work on over the next several months.


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Self-Exploration Exercise I

• When you imagine being retired, what picture comes to mind?

• What do you anticipate adding to your life when you retire?

• What do you envision giving up when you retire? • What ideas do you have about what your retirement

should be? • Imagine not retiring. What image comes to mind? Is it

positive? Negative? • Whose retirements have you observed?

Managing Transition is not always for retirement, but it is for Renewal

• Transition management is based on the idea that the best way to get people through transition is to affirm their experience and to help them to deal with change.

• Transition management is not always for retirement, but it is always used for renewal purposes.


Managing Transition

Transitioning away from a full-time law practice, selling a practice or closing a law practice should be organized and guided by a simple but comprehensive written plan so that all necessary steps are taken.


Washington State Bar Association

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2001 2011 Percent Change

ACTIVE MEMBERS 22,392 28,864 28.90%

ACTIVE IN WASHINGTON 19,267 23,611 22.50%

WESTERN WASHINGTON 16,690 20,566 23.20%

EASTERN WASHINGTON 2,577 3,045 18.10%

OVER 60 YEARS OLD 1,617 6,616 309.10%

21 TO 30 YEARS OLD 1,638 2,138 30.50%

Transition Planning

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Nova Scotia Barristers’ Society 2008 - Member Survey

481 of our 1825 practicing members (26.35%) have been practicing for more than 27 years.

Transition Planning

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Nova Scotia Barristers’ Society 2008 - Member Survey

Of the sole practitioners with more than 27 years at the bar:– 80.4% have no plan in place to deal with existing clients – 77.3% have no arrangements to deal with long-term storage of

files – 70.0% have no plans in place to deal with current staff – 64.5% have no plans in place to deal with financial demands of

practice (e.g. – rent and other payables/inability to practice)

Transition Planning

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Why Establish a Transition Plan?

-To protect your client’s interests

-To maximize the value of your practice

-To minimize financial risk and emotional upset to your family

- For sole practitioners, this program is particularly important.

Transition Planning

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How do you see your own Transition

Taking Place? Reduced hours? New associates or partners? Sale? Close out?

Transition Planning

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How do you see your own Transition Taking Place?

Office and File Organization Trust account balances File Retention and Destruction Policies Insurance Assisting Lawyer

Transition Planning

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Each Approach is Different

Special Needs of Sole Practitioners

Assisting Lawyers


an Assisting Lawyer

An individual who will step into your practice and deal with it on either an emergency or a long-term basis in the event of your disability or death.


Let the Journey Begin

38 Transition Planning

Months 1, 2 and 3

Compile list of names, addresses, phone numbers, and email addresses for all staff.

Keep this in a secure place outside the office, and make this available to another person.

Compile master list of all clients and all open matters.


Months 1, 2 and 3

Secure all computer records and make sure you have a backup copy stored outside the office.

Document the procedures for restoring these files.


Months 1, 2 and 3

Examine trust account to make sure all documentation is up-to-date.

Pay particular attention to balances that you have been holding for more than 30 days.

Examine leases and service contracts and other outstanding liabilities.


Months 1, 2 and 3

For all new work, prepare a memo outlining the relevant facts, deadlines, opposing lawyer(s), and important elements involved.

Select a manageable number of active matters each week, and prepare a memo outlining facts about each case (five a week).


Months 1, 2 and 3

Select a manageable number of closed files each week and remove them from Active Matter list.

Work to resolve any open question related to outstanding bills.

If you have partners, make sure another partner assumes responsibility for each client and every open matter. (five a week)


Months 1, 2 and 3

Identify a colleague who agrees to serve as your Assisting Lawyer, so you can begin working together on developing succession plans.

Discuss how the Assisting Lawyer will be paid and at what rate.


Months 1, 2 and 3

Develop a written plan or checklist for yourself to follow.

Begin sharing your transition plan with family, key friends and clients.


Months 1, 2 and 3

Stay away from the office for specified periods of time, to allow others to assume greater responsibility.

Did I say begin sharing your transition plan with family, key friends and clients.


Gallagher’s Transition


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Transition Planning Resources

• Planning Ahead Guide, New York State Bar Association publication

• Turning Out Your Lights: Planning for Closing your Law Practice, North Carolina Bar Association

• Rich Dad, Poor Dad by Robert T. Kiyosaki

• Younger Next Year: A Guide to Living Like 50 Until You're 80 and Beyond by Chris Crowley

Transition Planning

Thank you for participating in today’s program

Stephen P. Gallagher

[email protected]

610-660-0218


mailto:[email protected]

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