The below article appeared in the March 2012 edition of the Australasian Law Management Journal and can be found on their website here or downloaded in PDF format.

Putting the plan into succession planning

The failure to groom successors in a law firm is a recipe for disaster for both the firm and the founding partner who one day hopes to successfully exit the business, writes John Chisholm.

There is little doubt that succession is one of the most significant issues facing professional firms of all sizes and from all regions in Australia. I suspect this may be the case in the United States and the United Kingdom, too.

Recently I gave a talk entitled Succession Planning: Why Most Firms Should But Don’t outlining some of the reasons that Baby Boomers are still hanging in there and failing to consider the need to plan for the inevitable. These reasons are complex, but often include:

• Financial position: Anecdotally some partners who might have before the global financial crisis considered retiring ‘shortly’ feel they are no longer in a financial position to do so. Equally, there are other partners who have seen their incomes increase substantially over the last few years, in particular, and even the mere thought of them leaving that income behind gives them the cold sweats.

“For most of my professional life I have billed my clients in six-minute units. From the time I started out as a solicitor in the early 1980s, time billing was such an assumed part of the landscape that it barely merited discussion. Expressing reservations about it were regarded, if not as heretical, then certainly as futile.

Time billing was the way it had always been. If the system was to be abandoned, what possible alternative was there?”

David Vilensky discusses his firms transition to fixed fee pricing in his article which was published in the Law Society of Western Australia’s February edition of Brief.

The Benefits of Fixed Fee Pricing

Implementing Value Pricing

I have read many books on pricing, given my interest in the topic, and this is one of the most comprehensive yet understandable for lawyers.

Ron Baker, founder of The Verasage Institute, a think tank dedicated to teaching value-based pricing to professionals around the world, has written many books on this topic but his latest combines an up-to-date healthy mixture of the theory of value-based pricing and hundreds of practical tips and case studies to enable the theory to be put into practice.

This book is a must read for any lawyer even remotely interested in pricing their services other than by time. Even those who may not see any change happening in the legal profession or are not inclined to move away from time-based billing should read it, if only to be aware of what an increasing number of their competitors are doing.

It is also a book for those who say “value-based pricing is OK in theory but it just won’t/can’t/is too difficult to work in practice”. It is filled with proven, practical examples of how firms can and do price their services other than by time and successfully answer those critics who say it cannot be done.