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September 2026

Sep 30, 2026

Law Firm Succession Planning in a Multi-Partner Firm – Where to Begin?

Question: 

Our firm is a twelve-lawyer litigation firm in Chicago. We have six equity partners and six associates in the firm. One of our partners is 85 and the others are 78, 72, 69, 58, and 52 respectively. We have no succession plan in place, and we have done nothing for prepare for eventual transition. Any suggestions on where and how we should start?

Response:

You need to begin to have some serious discussions with your senior partners as to their retirement goals and timelines and determine how close together their exits will be. Can the remaining three partners hold and serve the clients? How experienced and senior are your associates? I suspect that you will have a large talent gap and you will need to either bring in some experienced lateral talent or consider merging with another firm. This could take a considerable amount of partner time and needs to be managed like you would manage a project, otherwise you will not have the focus and momentum to keep a things on track.

A key question will be how your partners will manage the work of the succession/transition/project while continuing to practice, serve clients, and managing the firm? How will they balance billable client production with the non-billable time that a succession/transition/project will require? Otherwise, the project will drift, will not be prioritized, and will fail to receive the proper attention to keep it moving forward. Newspaper reporters are taught to ask the following question when working on a story:

To succeed at managing a succession/transition/project you will need to ask and answer and address many of the same questions.

WHO

Who will lead, direct, and manage the project? In a solo or solo owner firm, this may be the owner, or an outside consulting firm retained to lead, direct, and manage the process. In a larger law firm, this may be the management or executive committee, a managing partner, or a transition committee formed for such purposes. Larger firms may also retain a consulting firm as well. Other outside advisors such as certified public accountants, financial planners, and insurance professionals may also be involved as well. Specific roles, expectations, and accountability should be developed for everyone, inside and outside the firm that will be working on the project.

WHAT

What is the specific nature of the project? The law firm should define the succession/transition project specifically. Will the project involve looking into all possible transition/succession/ options or will it be limited to a single specific option, such as sale of the practice to another law firm, admission of a non-equity partner or associate to equity ownership, or merger with another firm? Define the specific scope of the project and put it in writing in the form of a succession/transition/ project charter or project plan. Define desired outcomes.

WHERE

If the firm has multiple offices what office location, is the primary focus? In the case of a practice sale or merger, what geographical areas should the candidates be presently located? Will the project team have to be located in the same area as the law firm? Can the law firm and team members be located in different locations? Will the law firm require face-to-face team meetings? Will the meetings be able to be held remotely?

WHY

Why is the succession/transition/ project necessary? Why the project being considered? What are the consequences for failing to start and successfully complete the project – loss of key clients – loss of retirement payout and or sweat equity from the practice? Why is important to start the project now – rather than later?

WHEN

When should the succession/transition/ project start? When should the project be completed? What are the key milestone dates, specific tasks, and specific task start and completion dates?  Examples of two milestone dates in a larger firm that has a transition/phase-down plan might be.

  1. Start phase-down – January 1, 2020
  2. Retire – December 31, 2020

HOW

The HOW involves the how of managing the project. In other words, some of the basic project management tools used to keep the project:

The HOW also involves deciding upon and implementing the succession/transition/strategy that achieves the goals of the solo, sole owner, or equity owners in a larger law firm. Usually, the project planning HOW leads to the specific strategy and implementation HOW. The strategy and implementation HOW might involve selling the practice, admitting a non-equity partner or associate to equity ownership, or merger with another law firm. In the case of a larger law firm, it may involve the specific transition and phase-down activities.

If you put in place a solid project plan your partners will be able to balance priorities and transition the firm in a timely and effective manner.

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

Sep 23, 2026

Insurance Defense Law Firm Survival in the Age of AI

Question:

I am the managing partner of a sixteen-lawyer insurance-defense firm in Orlando, Florida. There are four equity partners in the firm, twelve associates, and eight paralegals plus administrative personnel. We manage the defense for various insurance company’s  insured primary in auto accidents, premises liability, and slip and falls cases. Our work comes primarily from four insurance companies. All of our clients are billed by the hour at low hourly rates with restrictions on the amount of time that we can spend on certain matters. We have resisted using any form of AI and we are continuing to staff our client cases as we have always done. Our clients are asking us what and how we are implementing AI and to reduce associate and paralegal time spend on their cases. I realize that we must change our ways and begin to implement some level of AI in our practice. However, I have concerns as to how we survive in a practice where partner livelihood in a low bill rate practice has been based on high billable hours and the profit margin off of associates and paralegals. What do you see as the impact that AI is having or going to have on insurance-defense law firms?

Response: 

AI is likely to have a major impact on insurance-defense law firms. Associates may not be totally replaced as firms will be able to handle more cases with fewer billable hours. Insurance companies will expect faster turnaround of their cases at lower costs. Implementation of AI by insurance company outside law firms will be a requirement.

Insurance-defense law firms will see the following changes:

  1. Much of the following associate attorney document related work will be handled by AI. (Many of our plaintiff personal injury clients are already using AI for this work):
    1. Summarizing medical records
    2. Reviewing claim files
    3. Summarizing depositions
    4. Extracting facts from police reports and incident reports
    5. Chronologies and litigation timelines
    6. Legal research
    7. First drafts of motions and briefs
    8. Discovery requests and responses
    9. Interrogatory analysis
    10. Drafting correspondence to adjusters
    11. Comparing pleadings against the facts in the claim file
    12. Identifying missing evidence
    13. Preparing deposition outlines
    14. Reviewing expert reports
    15. Analyzing large document productions
  2. Billing will shift from the billable hour to various forms of alternative billing. Several years ago, several major insurance companies shifted to flat-fee models and more insurance companies are likely to do the same. Several of our clients have reported that their effective rates have been higher under flat fee billing than they were when they were under hourly billing. AI will increase law firm productivity, but it will also decrease billable hours. Insurance-defense firms will have to find ways to maximize revenue and profitability under the new paradigm.
  3. Insurance companies will become more demanding than ever and expect more from their law firms. They will use AI to measure their law firm’s performance and case outcomes. AI therefore will not only change what defense lawyers do. It will change what their clients can measure about them.
  4. The pyramid model of stacking associates and paralegals could dramatically change. Gone will be the days of partners living off the profits from the labor of associates and paralegals. Firms will not need as many junior lawyers per partner and their will have an effect upon:
  5. AI may make experienced lawyers more valuable and trial lawyers may become more valuable.

When it is all said and done a major question will be:

  1. What will be the billing model? Hourly billing, hybrid hourly billing, contingency or success fee, etc.?
  2. Who will receive the most benefit – the law firm or the insurance company for increased productivity?

With reduced billable hours insurance-defense firms will have to either reduce associate/paralegal headcount or increase their case volumes. Business development will become more critical as opposed to simply relying on a handful of insurance company clients.

While AI is having and will continue to have a transformational impact upon society as well as law firms, we have seen this before with other forms of technology and law firms have successfully adapted and I believe that we will once again.

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

 

 

Sep 16, 2026

Law Firm Management – Characteristics of an Effective Administrator

Question: 

I am the managing partner of a twelve-lawyer business litigation firm in Toledo, Ohio. There are four equity partners, six non-equity partners, and two associates in the firm. Until three years ago I handled all of the administrative matters in the firm and was assisted by the firm’s bookkeeper. My practice and clients were suffering due to the amount of time I was spending handling the administrative concerns of the firm. So, the firm hired a professional legal administrator. Three years later it seems as if I am spending more time than before on administration and my practice is still suffering. Based on my readings it appears that our administrator is functioning more as a glorified office manager rather than an administrator. What are the characteristics of an effective (real administrator)? We are paying our administrator more than some of our non-equity partners and I don’t think we are receiving the value that we should be receiving. You comments and thoughts are welcomed. Thanks.

Response: 

Being the first administrator for a law firm is tough. In additional to proving themselves to the partners the new administrator will have the additional task of justifying the position itself. After a few months when the honeymoon is over some partners will start questioning whether the position is necessary and worth the expense. Often law firms have not really thought through what their expectations were for the position prior to hiring the administrator. Successful administrators don’t wait for the firm to manage them – they take a proactive role – initiate discussions regarding expectations and identify priorities, projects, etc. They look for low hanging fruit where they can  enhance revenue or reduce costs in the short term and track any results achieved.

It sounds like you have not clarified the role and documented role, responsibility, and authority in a well documented job description, don’t have agreement among the partners as to the administrators role and authority, or you hired the wrong person.

Skills and competencies are important but so are results. In order to maximize their value to their law firms, administrators must help their firms implement changes and improvements and improve performance. This requires selling ideas to partners in the firm and having them be accepted and actually implemented. To succeed administrators must:

– Provide innovative solutions or methods
– The firm must achieve measurable improvement in its results by adopting the solutions
– The firm must be able to sustain the improvements over time.

Based upon my experience working with firm administrators over the years and my discussions with managing partners, the following characteristics define successful firm administrators:

  1. The more successful administrators understand their role, authority and responsibility, in accordance with the partners’ expectations.
  2. The more successful administrators understand the firm’s current and evolving culture, and are capable of integrating and changing their behavior as required.
  3. The more successful administrators have the capability of shifting their management style as conditions and relationships in the firm change.
  4. The more successful administrators have intuitive personal characteristics and professional skills that enable them to perform their roles to satisfy the partners’ objectives and expectations.
  5. The more successful administrator have the ability to successfully implement and manage projects, over an extended period of time.

An administrator’s success with a given law firm will have a direct correlation to his or her level of acceptance by the partners. The firm’s culture will determine the value that the managing partner and members of executive committees place on their administrator.  An administrator whose personal style may be characterized by partners as “too laid back” may be inappropriate for a fast-pace entrepreneur firm and an administrator with a “Type A” personality may not succeed in a firm characterized by partners as “low key” or “laid back.”

In today’s law firms, partners place a much higher value on those administrators who understand, and are able to relate to the firms’ immediate and longer-term priorities. They seek to retain those administrators who perceive the firm from a “partner’s” perspective, not from an “employees’ point of view.” Partners’ value those administrators who are innovative and willing to question the status quo, and suggest changes for improving productivity and profitability.

The more effective administrators relieve partners of managing day-to-day administrative matters and save the firm’s lawyers time that can be directed to client billable work. These administrators have the ability to communicate with the managing partner and members of executive committees about management issues that should be brought to the partners’ attention. They have the ability to handle and resolve most administrative problems with minimal guidance from their managing partners or members of executive committees.

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

 

Sep 09, 2026

Law Firm Associate Recruiting and Retention Strategies in a Sole Owner Firm

Question:

I am the sole owner of a general practice firm in Indianapolis, Indiana. I have been in practice for 45 years and I am the only lawyer in the firm. I have a receptionist and a paralegal that also serves as my office manager and bookkeeper. I have tried hiring associates over the years, several times, but after spending time training them they eventually go elsewhere. I would like to reduce my workload and eventually retire. How should I approach finding and keeping an associate differently? Thank you for any ideas that you may have.

Response: 

This is a common and a major challenge for sole practitioners and small-firm owners. The mistake many owners make is viewing the associate primarily as someone who will help the owner get the work done. If you are approaching retirement, I would encourage you to look at the issue differently. Your next associate may not simply be an employee. He or she may be your future successor. This changes the recruiting, compensation, training, management, and retention equation.

I am sure that the turnover that you have experienced has been frustrating. Your reaction may be “Why should I spend the time and money training another associate if he or she is just going to leave?” Your problem may not be that you have failed to find good associates. You may have failed to give good associates a compelling reason to stay.

I suggest that you think about and ask yourself the following questions:

Question 1: Why are your associates leaving?

Determine why lawyers are leaving. Do not assume the answer is compensation. It may be. But associates also leave because they don’t see a future with the firm. After two or three years, the associate may be asking:

If the associate cannot answer these questions, the lawyer may reasonably begin looking elsewhere. You need to stop thinking about retention as how do you keep this associate from leaving and think in terms of what kind of future you can offer this associate?

Question 2: Should you Pay Higher Salaries?

You should pay competitively. You cannot expect to retain talented lawyers if your compensation is substantially below the market. But simply increasing compensation every time an associate receives an outside offer is not a retention strategy. You should develop a total compensation and career advancement program. Such a program might include:

The last item may be particularly important. Since you eventually want to retire, the opportunity to become a partner—and potentially the owner of the practice—may be worth considerably more to the right lawyer than another few thousand dollars of annual salary.

Question 3: Does the Associate Even Want to Become a Partner?

Thirty years ago, I would never have to ask an associate during an interview if they wanted to become a partner or own a law firm as everyone would have said yes. This is no longer the case. Not every good associate wants to become an owner. Some lawyers want a long-term professional position without ownership responsibilities. Others may want partnership but not equity ownership. The important thing is to find out. Ask, what does your ideal career look like five years from now? You may discover that the associate’s goals and the firm’s goals are highly compatible. Or you may discover that they aren’t.

Question 4: Should You Tell the Associate That You Eventually Want to Retire to retire? 

If retirement is reasonably foreseeable, I believe you should begin discussing the firm’s future. You don’t necessarily need to say that you are retiring in three years if you haven’t made that decision. However, you should be able to say that you are building this firm for the long term, and you want to develop lawyers who can assume increasing responsibility and potentially participate in ownership. This discussion can be extremely important. Associates are more likely to invest themselves in the firm if they understand that there is a future opportunity.

Question 5: Should you Involve the Associate in Management?

Yes—but progressively. An associate who may eventually become a partner or successor needs to understand that a law firm is a business as well as a professional practice. Over time, expose the associate to:

You don’t need to give an associate full access to everything immediately. But if you expect the lawyer eventually to help run the firm, you need to begin developing management capability well before the transition.

Final Thoughts

If you are a sole owner approaching retirement, I would encourage you to look at recruiting and retention differently. Don’t ask only how can you find a good associate – ask – how can you find, develop, and retain the lawyer who could eventually become the next leader of your firm? The answer to this question changes the entire strategy and you will begin thinking about succession much earlier. The ultimate objective isn’t simply to retain an associate for another year. It is to create a professional environment in which a talented lawyer can say – I can see my future here.

If you don’t develop a successor, you may eventually find yourself with:

The solution isn’t to avoid developing people, it is to develop them within a deliberate succession strategy. One of the biggest mistakes I see is sole owners waiting too long. A successful succession often requires several years. The owner must have time to:

In todays competitive market for talent you may find that you are unsuccessful in finding, hiring, and retaining an associate that is able or willing to be your successor. I am finding this to be the case with many sole-owner firms. In these situations, an external strategy such as merger or an Of Counsel relationship with another lawyer or firm is the course taken.

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

Sep 02, 2026

Law Firm Management – What is Keeping Law Firm Owners and Managing Partners Awake at Night

Question:

I am the managing partner of a ten lawyer firm in Kansas City, Missouri. There are five partners and five associates in the firm. We are an insurance defense firm and our clients are a handful of insurance companies. Our cases are primarily slip and fall, premises liability, and auto accident cases. I have been the managing partner for two years and frankly I am getting burned out on the position and none of the other partners want the job. I am working 60-70 hours a week and am spending so much time on administrative matters that I don’t have time to practice law. I would be interested in what is keeping managing partners in other insurance defense law firms awake at night and how they are dealing with the challenges.

Response: 

Managing partners in small insurance defense firms are telling me that the following top five challenges and concerns are what are keeping them up at night:

1.Finding and Retaining Experienced Lawyers and Staff

This is the biggest issue facing many firms. Gone are the days when you could place an ad and have a position filled within 30 days. I have client law firms that it has taken over a year to find and hire experienced (3-5 years) lawyers.  Billable hour requirements of 1800 – 2000 hours are conflicting with work life balance goals of many young lawyers. Retention is also a issue. Losing a strong partner or associate can mean lost revenue, disrupted client relationships, and months of recruiting and training.

You must plan on a longer recruiting timeline and use all avenues available to you. For example:

You must offer competitive benefits, work life balance and flexibility. Some form of remote work has become a major requirement and failure to offer schedule flexibility and remote work has resulted in  many law firms losing candidates to other law firms.

2.  Client Concentration 

Insurance defense firms often have too few clients and many insurance defense firms are held hostage by these clients. I have some law firm clients that only have one insurance company client and if that client were to start using another law firm the law firm would be in dire straights. The client controls the amount of case assignments that the firm receives, the bill rate, and the amount of hours that can be charged for various tasks. The firm is so busy working on client files that no one has time to market and try to get additional clients. Partners often know they need a more predictable pipeline but don’t have time—or a repeatable system—for generating new clients. It sounds like your firm depends heavily on a handful of clients. Losing one major insurance company client can materially change the firm’s economics.

Insurance defense firms must find ways to invest the time and other resources to add additional clients to their client roster resulting in less dependence on one or a few clients and move their practice up market with improved hourly rates in areas such as insurance coverage, corporate representation, and self insured clients. Such diversification has made many firms less dependent on 2000 plus billable hours and more attractive you new lawyers.  Many insurance defense firms have effectively done this.

3.  Cash Flow and Collections

It has often been said that businesses are killed by inadequate cash flow. A firm maybe profitable on the profit and loss statement but is cash always tight?” Slow-paying clients, write-offs, uneven matter flow, and payroll/overhead create constant pressure.

4. Technology and AI

Law firms are trying to figure out where AI can genuinely improve operations and lower operational overhead without creating confidentiality, accuracy, ethics, cybersecurity, or malpractice risks. What tools should the firm be using? Costs? Time to implement? Fear of AI reducing the need for lawyers?

You need to attend all the CLE seminars, webinars, etc. that you can and get up to date on AI. This is moving very fast.

5. Succession Planning

What happens when founding partners want to slow down and retire?” How does the firm fund buyouts? Smaller firms frequently have fewer obvious successors. Do the younger attorneys in the firm want to have equity and own a law firm and will they be willing to step forward?

You need to begin addressing this sooner than later. Our blog library has an entire section on this topic.

Click here for our blog on strategy.

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Click here for out articles on various management topics

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

 

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