Designing meaningful career paths – to take account of
changes in the structures of law firms
www.peterscottconsult.co.uk
Designing meaningful career paths
 Career paths for associates
when fewer partnership options
available
 Succession planning –
alternative career options?
 Exit strategies
 Does the ABS open up
opportunities?
PETER SCOTT CONSULTING
Developing career paths for associates when fewer
partnership options are available
 High performance by people is key to gaining competitive
advantage
 High performance requirements , tough economic times and
smaller ‘ownership pools’ mean more demanding ‘gateways’
to partnership - the bar is higher.
 The challenge is how to manage career expectations - and
avoiding unnecessary disillusionment
 Has it ever been any different?
PETER SCOTT CONSULTING
Do law firms ask their people what they want from
their careers?
 Firm – wide surveys to uncover reasons for staff losses or
disillusionment
 360 degree feedback as part of a development and
assessment process
 For longer term succession planning
 Exit interviews
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Investment in your people to realise their financial
value to your business
 For high achievers who want partnership - transparent and
fair selection processes so people know what they need to do
 Tailored programmes which support their development and
groom them for success
 Intensive fast track coaching programmes for those identified
as having greater drive and potential
 Job sculpting – to help mould roles to match the people
available
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Investment in your people?
Who has a ‘partner development programme’ designed –
 To bring people through to partnership?
 Which continues throughout partnership?
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Retaining talent where partnership is not available?
 Not everyone wishes or is suited to becoming a partner
 External ownership is likely to increase at the expense of
partner numbers
 How can law firms motivate such people and persuade
them that there is still a very worthwhile career in the
firm?
 The experience of the large surveyors and accountants?
 No easy answers
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Managing career expectations
 Is partnership still the ‘holy grail’?
 No stigma to not being a partner
 How to make your firm the place
where people want to work?
 Ask them
PETER SCOTT CONSULTING
Succession planning - for not being a partner anymore
Planning is the key – for both
the firm and partners
• Economic pressures to
reduce equity
• Mandatory retirement ages
falling
• Lack of career prospects
• Loss of talent
• Repayment of capital issues
• Pension issues
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What not to do….
“Don’t put your head in the sand”
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Aim of succession planning?
To ensure the current and future well
being of a firm by reconciling the
interests of -
 Older partners
 Managing partners
 Younger partners
 Clients
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What should a plan aim to do?
To make optimum use of all productive
resources within a firm – because lack of people resource is a
problem for smaller firms
Firms need to creatively think how best
to use what they have – examples?
- Risk and compliance roles?
- Others?
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Older partners
As part of a plan towards retirement  Make them feel valued
 harness their skills and experience
 Match contribution to reward
 Agree financial arrangements
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Managing Partners
 Need for career paths / parachutes
 Return to fee earning?
 Change of career?
 Is there now a market within the law for managing partners?
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Clients
Firms forget clients at their peril
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Preparing for tomorrow – younger partners - does the
firm have a future?
 What to put in the place of retiring partners?
 Focusing on younger partners highlights future issues
 Does the firm have the ‘people resources’ to achieve its future
objectives / survive?
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Differentiate succession planning from partner culling
Compare –
 Partners who
- still have hunger and energy
- and are fully contributing
 Partners who have taken their foot off the accelerator
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Exit / de-equitisation strategies for partners
 Performance related culling
‘Tell us why you should continue to be a partner in this firm’
 Age related culling
‘Now that you are 50, tell us why you consider you should
continue to enjoy a full profit share’
PETER SCOTT CONSULTING
Exit / de- equitisation strategies – the impact of reward
structures on a firm’s options
 The potential restrictions imposed by lockstep
 The potential flexibility created by performance – based
reward structures
NB – using reward structures is not a substitute for dealing with
partner under-performance
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Particular techniques
 Out – placement?
 External counselling?
 Help them to set up in
practice?
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Alternative Business Structures – opportunities to
create entrepreneurial roles for partners?
Do you need an ABS for a partner to
be entrepreneurial (or more
entrepreneurial)?
A need to differentiate between types
of ABS for this purpose –
 The ABS with an external investor
 The MDP owned by different
professionals
 The traditional law firm which
takes in non – lawyers into
management positions
PETER SCOTT CONSULTING
One view is …
 There are many very entrepreneurial and successful partners
in existing traditional law firms - why do you need an ABS?
 Many law firms are already run along corporate lines, and
with a limited number of owners and high leverage, providing
opportunities for the entrepreneur lawyer to flourish.
 And, for the right type of firm which is appropriately
structured, there are opportunities for the entrepreneurial
partners to build and realise capital.
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Another view is that …
 Access to external capital and resources in an ABS owned (or
partly owned ) by an external investor can provide the
ambitious entrepreneurial partner with far greater horizons
and opportunities , including building capital.
 The MDP may open up interesting avenues for successful
future professional practice which do not exist at the moment
PETER SCOTT CONSULTING
There are also other views …
 Private equity looks to management to grow value in its
investment – what are their views about lawyer managers?
 In MDPs – will the accountants expect to run the business?
 Only time will tell whether the ABS will create the competitive
changes in the legal profession envisaged by Clementi and
provide greater opportunities for entrepreneurial partners.
PETER SCOTT CONSULTING
Questions?
PETER SCOTT CONSULTING
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Designing meaningful career paths * to take account of changes in