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December 2025

Dec 31, 2025

Law Firm Succession Planning – Retire or Continue Working?

Question:

I am a 64 year old lawyer that owns a small general practice law firm in Springfield, Illinois. There are two associates in the firm and two staff members. I have been thinking about retirement and how I should begin planning for it which I have not done. I love the work that I do for clients and have very few other interests. I get satisfaction and fulfillment from my work. I really want to work for ever. I would appreciate you thoughts.

Response:

You are not along. I have many lawyer clients that are in the 80’s and still working and going strong. I had a personal injury plaintiff attorney in his mid 80’s that tried a large medical malpractice case last year and obtained a very large jury verdict in the case.

Many lawyers, more so than many other professionals, are high achievers that are married and addicted to their law practices.  They believe that their self-worth is reduced if they are not accomplishing something important. Psychologists refer to this as “achievement addiction.” In his book, The Psychology of Retirement, Derek Milne advises that surveys in the United States suggest that over sixty percent of retirees “un-retire” and continue to work in some form of paid work, then “re-retire” or semi-retire” later on in their retirement (Milne 2012, 11-05). A major challenge for lawyers that have an achievement-focused personality will be to find ways to replace the sense of achievement that they have experienced from the practice of law after they retire. While playing golf may be a worthwhile recreational activity for those that enjoy it, it will not be enough to fulfil the needs of those with an achievement-focused personality. These individuals will need activities where they can contribute and make a difference and continue to fulfil their self-actualization and self-esteem needs. Activities such as mediation, teaching, consulting, volunteer work and community leadership often fulfil these needs.

Identifying Other Interests

Many of us have heard some of the stories of unhappy retirees ranging from poor health, depression, and premature death. Years ago when my mother passed away my father’s boss asked my father what he could do and how he could help. My father told him, “keep me working.” My father’s boss kept my dad working and he worked every day of his life until he passed away at 84. Dad used to tell me that when you enjoy your work and your work is your hobby, it is not work. For some people the best way to retire may be to continue working.

For others, rather than being a time of easing back and retiring into old age or continuing to work in one’s old job or career, it can be a time of personal growth and an opportunity to explore other interests, callings, and vocations. It can be a time of freedom to do what you always wanted to do but could not because you had to earn money and the pressure of work prevented you from pursuing you dreams and interests that were in tune with you values and beliefs. Here is a list of a few areas that you might want to explore:

  1. Teaching courses at a local law school or university
  2. Mediation
  3. Pro-bono work
  4. Writing
  5. Photography, gardening, travel, or other hobbies
  6. Serving as a director on a profit or non-profit board
  7. Counseling
  8. Volunteering

Planning Your Retirement

One way to begin to visualize getting older, your mortality, and retirement is to think about the amount of time that you have left on this earth. If you are sixty-five you may live to be eighty. Thus, you have fifteen years left and this is your planning horizon. Retirement planning is deciding on how to use this time. It is about the process of deciding what you will do in your retirement and putting a plan into practice. As the amount of time left to you decreases, its value increases to the point where it will be more valuable to monetary assets.  It will be more valuable that a new house, a new car, a new boat, or a chest full of cash. Time enjoying life, being with your family, and spiritual renewal will become more important than earning money. The greatest change when you retire is how you will use your time.

Retirement planning begins with taking the time to think about how you will use you time. If you live fifteen years beyond your retirement your will have 28,800 hours that will have to be filled with retirement activities. (five days a week, eight hours a day, 48 weeks, for fifteen years)  Start by creating an interest activity list, a time plan, and then DECIDE, PLAN, and ACT.

Options include:

  1. Continue working in your present situation;
  2. Continue to work for compensation but in another occupation; or
  3. Retire and pursue recreational and other retirement activities without compensation.

If you decide to keep working you need to begin thinking about your succession plan when and if something happens to you. It may be time to consider bring lawyers in the firm into equity ownership or at least have in place an arrangement or agreement with them in event that something would happen to you – a practice continuation agreement. 

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

 

Dec 24, 2025

Law Firm Talent Management – Acquiring, Training and Retaining Paralegal Staff

Question: 

Our firm is a four attorney estate planning firm in Orlando, Florida. I am the owner of the firm and the other three attorneys are associates. We have three paralegals, a bookkeeper, and two administrative assistants. Approximately sixty percent of our practice is estate planning, thirty percent probate and trust administration, and ten percent elder law and special needs planning.

Our major challenge is finding and retaining paralegals. Over the years it has been our practice to hire experienced paralegals with three to five years experience. While this worked for us in the past we are currently experiencing high turnover, poor quality of work and performance, and high compensation cost resulting in our overhead getting totally out of control. What are other firms doing? Any suggestions and recommendation that you may have will be most appreciated.

Response: 

These are tough times for finding, attracting and retaining paralegal and lawyer talent. Law firms are having difficulty hiring experienced paralegals at an affordable salary and then retaining them. You may want to consider growing your own and begin hiring recent graduates from paralegal programs at colleges, junior colleges, and paralegal schools. These schools offer bachelor degrees in legal/paralegal studies, two year associate degrees, and post bachelor graduate programs.

Small law firms generally do not have effective training programs and the training resources needed to do effective on the job training. This is the primary reason that small law firms hire experienced paralegals rather than growing their own. Larger firms have training resources such as paralegal supervisors, trainers, written procedural manuals, and other training tools. While a small firm such as yours can’t have all of these resources maybe it is time to begin to develop some of the following tools so you can grow your own.

  1. Write a procedure/training manual for each practice area:
    1. Estate Planning
    2. Probate and Trust Administration
    3. Elder Law
    4. Special Needs Planning
  2. Identify a paralegal in your firm to onboard and train new paralegals.
  3. Develop relationships with paralegal schools to help you identify the best graduates and candidates.
    1. Form relationships with school paralegal program and career center directors.
    2. Serve as a guest lecturer and make presentations to law clubs, classes, etc.
    3. Conduct on campus recruiting.
    4. Solicit referrals from program and career center directors.
    5. Implement a paralegal intern program.

Homegrown employees often prove to not only be less costly but in the long more committed to your culture and processes, more dedicated and loyal, and more likely to stay with your firm for many years.

Many of my law firm clients are telling me that finding clients is no longer their primary concern – their top strategic concern is now finding, hiring, and retaining lawyer and staff talent. During these times it is imperative that law firms get creative and think outside of the box. Flexibility is key. Here are a few things that some of my small law firm clients have done that has resulted in successful experienced paralegal and attorney hires:

  1. Paid for sponsoring with Indeed ad placements.
  2. LinkedIn ad.
  3. Took out a paid ad with their state bar association.
  4. Used a recruiter.
  5. Increased starting salary/bonuses.
  6. Added medical insurance as a benefit.
  7. Paid a signing bonus.
  8. Provided reimbursement for moving/relocation costs.
  9. Implemented a permanent remote work policy allowing all personnel to work at home a certain number of days per week.
  10. Increased number of vacation/personal time off days.
  11. Added 401k plan.
  12. Hiring offshore lawyers and paralegals.

Successful law firms must attract both clients and talent in order to be successful. All law firms are suffering and having a hard time attracting and retaining attorneys and staff. This also means that other law firms are desperate and may try to steal you lawyers and staff with better pay or other incentives. You need to review all of your benefits and policies as well as compensation to make sure that you are more that just competitive – you need to be on the cutting edge and ahead of the pack. Employees now expect more flexibility, remote work, etc. than ever before.

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

Dec 17, 2025

Law Firm Management Structure and Governance

Question:

Our firm is a twelve lawyer business law firm in San Antonio, Texas. We handle business transactions as well as ligation. Three of us partners started the firm seven years ago and the firm has grown since then. Currently there are seven equity partners and five associates in the firm as well as six legal assistants/paralegals and a bookkeeper. One partner serves as managing partner. The managing partner handles all of the administration except for the basic bookkeeping. Many management decisions require the approval of all of the partners. We are beginning to feel that we have outgrown our management structure. Excessive time is spent by the managing partner. He is spending 40 percent of his time on firm administration. His practice is suffering as well as revenues. An inordinate amount of time is spent by the rest of the partners on administrative and management decisions. We have monthly firm meetings and virtually all of the time is spent on administrative matters. It takes us forever to reach consensus. Recently it took us six months to reach a decision on getting the carpet cleaned.

We would appreciate any thoughts or suggestions that you might have.

Response: 

While the firm’s management structure worked for the firm in the past when the firm was smaller, more structure will be required if the firm hopes to grow and be more profitable in the future. Growth will require structure at the partnership and administrative level. The managing partner is spending way too much time on administration as well as the other partners.

The partners should consider hiring a firm administrator to handle all administrative matters and the managing partner or a three partner management committee should focus on higher level management matters. The full partnership should weight in only on matters reserved for their vote and approval. As the firm grows the partners should involve others in management without micro-managing.

A problem facing most firms is lack of long-range focus and the amount of partner time that is being spent on administrative matters as opposed to higher level management issues.

Partners in many law firms spend more time on administrative management matters rather than higher level management/leadership concerns such as lawyer management, attorney compensation, process, business development, mentoring, and long-range planning.

Management deals with those issues that relate to overall control of the firm, including those decisions that should be made by equity partners and the selection of an individual or individuals who will manage and administer the firm. The clear trend today is for centralized management, with substantial authority being delegated to whoever is selected for management and administration.

Specific policy matters that might be reserved for full equity partner vote include:

Specific policy matters that might be the domain of managing partner or management committee might include:

A firm administrator appointed by the managing member or co-managing members would direct the business/operational affairs of the firm and would report directly to the managing member/partner or co-managing members/partners.

Administration 

When we discuss administration, we are referring to the everyday management of the firm as it relates to finance, staff, and systems. Clearly, today’s trend in administration is to hire competent professionals at the level that suits the firm. Administration is the execution of management policies established by the equity-members and the managing member/partner, co-managing members/partners, or executive/management committee.

At your size I believe that you are ready for a firm administrator. The firm revenues presently being lost will more than pay the salary of an administrator and still leave additional profit to pay additional compensation to the partners.

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

 

Dec 10, 2025

Law Firm Succession – Encouraging Partners to Transition Clients

Question: 

I am one of eight partners in a fourteen lawyer insurance defense firm located in Indianapolis, Indiana. Besides the partners there are six associates working in the firm all of which are newbies. The partners ages are 70, 68, 65, 62, 60, 58, 54, and 51 respectively. We have several partners at retirement age and we are looking for ideas on succession planning and how to encourage retiring partners to properly transition clients. We have had partners retire in the past and we did a poor job of client transition and the firm lost clients as a result. We appreciate any thoughts that you might share with us.

Response: 

There needs to be a process established for retiring partners with specific agreed to activities on the part of the retiring partner with firm management. Steps should be taken to allow and assist other designated partners (transition partners) within the firm to develop a direct relationship and have responsibility for managing these clients. Such a process should include:

  1. Notification by retiring partners of intended retirement date – three to five years before actual retirement. At this time client transition should begin.
  2. Identify clients that will be transitioned and to whom. Specify specific transitioning tasks that are to be performed by the retiring partner and transition partner, or partners and timelines.
  3. Consider assigning Co-Responsible Attorneys to each client matter that will be transitioned. Have the attorney to which the clients are to be transitioned begin approving client invoices for services performed.
  4. Ongoing follow-up and evaluation on at least an annual basis by firm management as to the status and level of success of agreed to client transition activities.

Don’t Forget the Money – Financial Incentives To Transition Clients 
Generally, the compensation of those partners who are transitioning towards retirement will be determined in the same manner as compensation for all other partners, taking into account partner origination collections, client liaison collections, matter origination collections and working attorney collections, together with other factors that the managing partner and members of the management/compensation committee may consider relevant. However, with respect to the retiring partner, the managing partner and members of the management/compensation committee will pay particular attention to the former’s performance of the transitioning duties assigned. If it is determined that the retiring partner is satisfactorily performing the transitioning activities, the retiring partner will continue to receive full credit for those fee collections from clients being transitioned, in the various categories considered by the managing partner and members of the management/compensation committee in setting compensation. However if it is determined that the retiring partner is not satisfactorily performing the transitioning activities, or if the fees generated from these clients increase or decline, those factors will also be considered by the managing partner and the management/compensation committee in setting the retiring partner’s compensation, and the compensation may be increased or reduced appropriately.

Consider Dual Credit for Client Collections
In order to provide incentive to those partners to whom clients are being transitioned, and to insure that those attorneys are fairly compensated for their efforts in transitioning and maintaining these client relationships, the partners designated to be the transitioning partners for the client to be transitioned will also receive credit under the categories as may be applicable, for the fees generated by these clients during the transition period, provided that the managing partner and the members of the management/compensation committee determines that the transitioning partners are making satisfactory efforts to  accomplish the transitioning of clients.

Assignment of credit to the transitioning partner should not reduce the amount of credit allocated to the retiring partner, unless the retiring partner is not satisfactorily performing the agreed to transition activities.

Click here for our blog on succession/exit strategies

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

Dec 03, 2025

Law Firm Succession Planning – Spouse Having to Windup a Husband’s Practice

Question:

My husband’s ( Robert) practice is located in Alexandria, Virginia. The practice is a general practice with a focus on estate planning, family law, and real estate. He is now sixty and suffering from Alzheimer’s.  He has three legal assistants and two associate attorneys. The associates are newbies each out of law school less than three years, are risk adverse, have no client book of business, and have no desire to own a law firm.  As my husband’s physical health has declined his mental acuity has declined as well. However, rather than examining possible succession alternatives he has continued to practice and the quality of his services to clients has declined. Clients have taken notice and many have taken their business to other law firms. Recently I, who serves as the firm’s office manager,  approached several law firms regarding possible sale of the practice. All of the law firms that I approached have rejected my proposals advising me that since the firm is “uniquely my husband” and without a lengthy transition, they do not believe that there is sufficient value to warrant a practice acquisition. Four weeks ago, I approached both of the associates and both advised me that they did not wish to acquire this or any other law practice. Last week both associates gave their notice and advised that they were joining other law firms in the area. Based upon the medical advice of my husband’s  doctor he has decide to close the practice and has asked me to handle the logistics of closing down the practice.

Response:

Unfortunately Robert’s failure to plan for his succession and transition has resulted in:

  1. Loss of compensation for the goodwill of his practice and the sweat equity that he invested because of the need for a hasty practice sale;
  2. A one generation law firm;
  3. Loss of peace of mind for Richard’s family and employees;
  4. Failure to provide continuity for clients and employees; and
  5. Failure to continue the legacy of the firm that Robert built.

Had Robert reconsidered his attitude of having partners, hired and groomed entrepreneurial associates with a desire to own a law firm, institutionalized the firm’s brand to be less uniquely Robert, and put in place both a short-term practice continuation plan and a long-term succession plan, the story may have ended differently.

You may not have much choice but to close the doors and windup the practice. You should check with your state bar association regarding your state court’s rules for the proper procedures for doing this. In many states a court may step in when a solo attorney:

Because clients’ cases, funds, and confidential information must be protected, the court ensures there is a responsible lawyer to manage the transition. Typically the court-appointed attorney (sometimes called a practice administrator, trustee, or receiver) is authorized to:

  1. Secure and inventory client files
  2. Notify clients of the situation and their options
  3. Return client files and property
  4. Manage trust accounts and distribute funds properly
  5. Seek continuances or withdraw from cases appropriately
  6. Close the office, handle billing, and deal with vendors
  7. Ensure ethical obligations are honored

They do not usually take over the cases themselves unless the clients choose to hire them separately.

The goals are to:

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

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