I recently spoke at a Pennsylvania Bar Institute program titled “Succession Planning for Lawyers,” along with attorneys Dennis Reardon and David Fitzsimons and Gina Sage of the insurance company CNA. It’s brought to mind by a recent news report about a large law firm that is having difficulty with the succession process; specifically, that older lawyers are not turning over their client relationships to younger lawyers. The report expresses the view that an important reason for this “clogging” of the succession process was that older partners were still being paid based on their client originations. Since lawyers generally do what they are paid for, that’s no surprise.

There are really two issues that are causing this problem, not only in the law firm referenced in the report, but in many others. The first, as indicated, is that lawyers of a certain age are being told to do one thing, but are being paid to do something else. They are being asked to participate in the orderly transfer of client relationships and to ensure that longstanding clients continue with the law firm with supervision and management by younger lawyers. But they are not being paid for making this transition a success or they do not perceive that they are being paid for this work. Instead, their compensation is being determined based on the criteria applied to younger lawyers, which is often highly correlated to client originations.

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