PHOTOS BY LISA PREDKO MEIGHAN HARMON, Schiller DuCanto & FleckSUCCESS IN SUCCESSION CAN MAKE OR BREAK A FIRM When Chuhak & Tecson’s Josh Hyman began ponder- ing his next career move about a year ago, he took to the internet. “Things that lawyers do after the age of 50,”he Googled. A brainstorming session ensued. He had contemplated every- thing from going into business with friends to opening a ro- tisserie-style chicken shack before he concluded that he’s go- ing to develop a computer lab in southwest Chicago to educate kids who don’t have access to technology. Hyman was able to do all of this with perhaps a smaller degreeofstress sinceheknewthelegalpractice hehadde- veloped was going to be in good hands. Hyman had announced in January 2013 his plans to leave the role as the firm’s banking practice group leader within five years. He didn’t know if his future held chicken shacks or tech labs, but thanks to a strong succession plan, the practice group he started in 2002 was prepared for its own next step. On Jan. 1 of this year, his title changed to special counsel, a role in which hestill works at the firm, butno longer has ad- ministrative duties. Hyman credits having a succession plan in place and fol- lowing through on it over the course of those four years as to why the practice has seen no turnover in its attorneys and no loss of clients. Following the announcement that he would be leaving the position, Hyman began preparing other attorneys in the prac- tice group to take over his clientele. He then began thinking about who would be next to chair the practice group. After what Hyman called an “o rg a n i c” process of first consulting with the partners in his practice group, then with the firm share- holders, Eileen Sethna was named to lead the group. While that process worked smoothly at Chuhak & Tecson, not all firm leaders may be able to give four years notice. Hyman said that whatever a principal’s time frame is for chang- ing roles, it’s important to stick to the announced plan. “The first thing I think was really important was to identify a date certain by which your succession plan will trigger. Too many lawyers wait. They’re ambiguous about it. It’s sort of like doing an estate plan. You don’t want to sign because you don’tcession plan. An additional 27 percent said they had an informal one. The greatest number of respondents —32 percent —said they had no plan. A 2015 Altman Weil survey found a greater chunk of its re- spondents —31 percent —had a formal succession planning process for lawyers approaching retirement. That number was up from about 27 percent in its 2013 survey, although there is a note in the newer survey’s margins: “The progress firms have made in two years does not show the level of seriousness that is needed to address this huge problem in the profession.” The lack of planning appears to be even more significant when it comes to smaller practices. When the Attorney Registration & Disciplinary Commission surveyed attorneys during the regis- tration process last year, it found that 77 percent of the state’s approximately13,500 solepractitionershadno writtensucces- sion plans. What difference does having a plan make? In severe cases, no plancan leadtothedisintegration ofafirm,according tolegal consultant Kent Zimmermann. “Particularly in firms with less than a couple hundred lawyers, there is an increased likelihood that a lack of effective succession planning could be an impediment to the firm’s long-term suc- cession,”said Zimmermann, a principal with Chicago-based Zeughauser Group. “Some firms where that happens start to lose top talent who get concerned about the firm’s future …then they find that they need to merge out of necessity, or they slowly become less competitive in the market because they don’t have the leadership they need.” Zimmermann and many Chicago law firm leaders said they think more firms are thinking seriously about developing formal succession plans. The growing interest is a part of what led Neal, Gerber & E i s e n b e rg ’sleader, ScottFisher, tobeginresearching thetopic himself recently. Fisher was named as the firm’s managing part- ner in 2015 and began in the role in January 2016. Fisher, 45, is only the second managing partner of the 31-year- old firm, which was run by an executive committee for its first 11 years. Fisher largely creditedthe firm’s smooth transitionto his for- JOSH HYMAN, Chuhak & Tecson mer managing partner Jerry Biederman, whom Fisher said helped him prepare for the role. want to acknowledge your death …I think fear and uncertainty “For Jerry, this was not a victory lap,”Fisher said. “It was about of theunknown is a bigimpediment for lawyersidentifying that what’s in the best interest of the enterprise.” trigger date,”he said. Looking back on the process his firm went through, Fisher offered his tips for the most successful transition: focus on tim- PASSING THE TORCH ing, openly communicate, understand the firm’s history and the For Hyman, forming a succession plan was one of his top pri- context in which the successor is assuming the role, be self- orities when he knew he was ready to pass the torch as practice aware and understand and embrace generational diversities. groupleader. Inmost casesat firms,though, thereare nosuch Before any plan can happen,he emphasized, the firm’s lead- plans. ership must be prepared to look ahead. Of 562 firms around the country who responded to a 2015 “Does the current leadership team have in its view the best legal sector survey from Cushman & Wakefield, a real estate interests of the enterprise and its long-term viability, or them- consulting firm, only 15 percent said they had a formal suc- selves?”he said. “I think the challenge for any firm grappling withthis is probably some self-reflection and to assess: What does Kevin Burkeas itsnew chairmanin June2015. Thefirm’s pro- the world look like for them out 10 years?” tocol for succession calls for each equity partner to be inter- In Neal, Gerber & Eisenberg’s case, the firm’s executive com- viewed in order to get their thoughts on who should be the firm’s mittee selected Fisher as its managing partner from a pool of next leader. attorneys it had considered. The announcement came six months Mrozek formed a blue-ribbon committee of attorneys who before Fisher took the reins, a timeline which he said can vary w e re n ’t in leadership positions at the firm to interview all of the from firm to firm, but is critical in each and every case. equity partners. That group then took the partners’re s p o n s e s “I think we were quite successful in being very deliberate in and made a recommendation to Mrozek. He forwarded that rec- what our plan was, communicating and then executing on it. My ommendation to the management committee, which had a advice to anyone else going through a transition would be the lengthy discussion. The entire partnership then voted, and Burke same: Be deliberate about identifying what your plan is, com- was unanimously named the firm’s leader. municating it, setting deadlines and then meeting them.” The six-month transition period at Neal, Gerber & Eisenberg gave Fisher time to work closely with Biederman, including one- on-one meetings every week in which they talked about Bie- derman’s responsibilities. In addition to sticking to a timeline, Fisher said he was sure to be transparent throughout the process of becoming the firm’s first new leader in 19 years. Fisher said he often meets with associates and partners to get their input on issues, keeps his door openand surroundshimself with peoplewho willgive him honest feedback. While Fisher noted that he thinks there are certain guideposts that are essential to a successful transition, how a firm goes about executing a plan can lead to differing results. “I think this is more art than science,”he said. EXPECTING THE UNEXPECTED Fisher isn’t the only Chicago firm leader who understands the importance of timing in leadership transitions. At Hinshaw & Culbertson, three firm leaders each died un- expectedly of heart attacks during a 10-year period before Don- ald Mrozek became its chairman in 1989. When managing partner Dennis Horan died in 1988, the firm’s partners weren’t sure what to do. “We were totally unprepared for what was going to happen next,”said Mrozek, who stepped down as chairman in 2015 after serving in the role for nearly 27 years. “It was a very unpleasant experience. There was a lot of disagreement among the partners as to who should take over without any preparation for the job.” When Mrozek was named the firm’s leader about a year after Horan’s death, the partners had a “businesslike discussion”that went into selecting him as leader, but there was no thought-out, written plan. About 10years afterMrozek wasnamed chair,he andother leaders at the firm began to recognize the need for a more formal succession plan, or a “breathing document”that could be altered over time. “The new reality set in. I had been there a long time already by then, and we better start having a plan in place for how we’re going to proceed with transition,”he said. DONALD MROZEK, Hinshaw & Culbertson That plan was later used when the firm went about namingMrozek said having that protocol in place long before it came Coleman said he’s found to be essential to his transition and time to select a successor was essential to the smooth tran- meeting with the firm’s partners helped to cement that idea. sition. “This was really just like a crash course in what the partnership “Firms really need to become both more proactive in this arena believed and wanted, and it really showed me what the views of and if they’re going to do it right, they need to address it when it’s the partnership were, and that’s where you get the balance of not an issue,”he said. “Timing is very important here. Getting change versus continuity,”he said. something in place before the event is critical.” “It was enriching, it was rewarding, it helped me realize the Since Burke was named as chairman, Mrozek has established importance of keeping these conversations going, of asking the and currently chairs the firm’s new Consultants and Coaches for partnership, what do you want? I think a transition can help spark the Profession practice, in which some of Hinshaw’s more ex- this dialogueand engagement. Whenthey know there’sa new perienced attorneys offer up their advice on business-related chair coming in, they’re more apt to tell us what they think,”he legal issues to other attorneys and firms. added. “It helped create this sense of great enthusiasm and Mrozek noted that changes in the legal profession add to the support, so nobody felt excluded from the process. Even though fact that firms shouldn’t simply name their latest successors the vote was at the management committee level, we were based on whomever has the biggest books of business or the hearing from all of our partners.” most seniority. Some of those changes involve more complex After the interviews, all five candidates presented their visions business issues facing law firms, which he said include tech- to the management committee, who selected Coleman as nological advances, the growth and globalization of firms and c h a i r. more complicated organizational structures, such as manage- Prior to Coleman’s selection, he had been involved in a number ment of partner agreements. of leadership roles at the firm that prepared him for the position, He described the process of naming a leader as once being like including serving as the global head of the firm’s corporate and “I THINK A TRANSITION CAN HELP SPARK THIS DIALOGUE AND ENGAGEMENT.” a game of musical chairs, passing every few years between transactional practice and as the partner-in-charge of the Miami leaders. About 15 years ago, though, Mrozek said the roles office. changed to become more career-type positions, with attorneys Those roles weren’t necessarily a part of a formal succession oftenremaining aschairmen ormanaging partnersfor thelong plan, but they served as stepping stones to him being considered run. for the chairmanship.The others who vied forthe position sim- “A lot of us that have been in roles for a long time recognized ilarly had been in leadership positions, Coleman said. that ‘Hey, I want my legacy to be strong. What’s good for the firm “It wasn’t one boot camp for all of us so to speak over the last is that I pass this torch and be here to help ensure a smooth five years, it was more or less an individualized leadership train- transition and I think partners in law firms, overall, share that ing program for many of us and the result is that you have a firm n o w, ’”he said. that’s got a lot of people who are in a position to be prepared to lead it,”he said. EMBRACING CHANGE As smooth as a firm can hope a leadership transition will be, it will A SEAT AT THE TABLE inevitably involve change, something Ira Coleman, the new chair- While training top-level leaders can be a part of a succession man of McDermott Will & Emery, has embraced. planning approach, involving younger attorneys in marketing and Coleman was elected to the position following a highly in- preparing them for leadership roles can also be a part of the volved process that included five people campaigning for the process. In the Cushman & Wakefield study, 56 percent of re- chairmanship. Each of them went around the world to McDer- spondents who were associates said they are not currently in- mott offices as a part of what Coleman called an “a p p ro p r i a t e l y volved with partner succession, but would like to be. grueling”process wherein they interviewed with various partners At family law firm Schiller DuCanto & Fleck, younger attorneys over a five-week period. are encouraged to “learn the business of the practice while you’re Finding a balance between continuity and change is what learning the practice,”said senior partner Meighan Harmon.Harmon, 45, was nominated in 2015 to join the firm’s executive gotten smarter about naming their top leaders since the market committee. She said she thinks this was a part of the committee crash forced them to do so. members’vision of wanting to give younger attorneys a seat at “Before things got so competitive, it was easy for many firms the table. to succeed in spite of themselves. In other words, it was easy for “I think that having younger people on the executive com- many firms to succeed even if they didn’t have an effective mittee early so that they have a long lead time in learning the l e a d e r, ”he said. “Post-2008, the industry has gotten far more business of the firm before we’re expected to run with it someday competitive. It’s much harder to succeed without effective lead- eventually is important because the longer you have the ability to ership.” observe and learn, the better you’re going to be when the time Zimmermann said he doesn’t think there’s a one-size-fits-all comes,”she said. approach to succession planning, and there are a multitude of “Giving us a long runway to really meaningfully have an op- factors to consider in the process.Chief among them all, Zim- portunity to learn about the detailed business operations of the mermann said, is partner buy-in. firm is the plan, and I think it’s a great idea,”she added. Equally important to having the firm’s partnership on board Harmon acknowledged that there can be a challenge, though, with the outline succession process, he added, is developing a whenit comesto findingthe rightwayto goabout selectinga plan in the first place. firm’s new top leader. “I think it behooves firms to come to a consensus among key “The amount of business any particular capital partner gen- partners in the firm about what the approach and process should erates is certainty a factor in terms of how much influence they bebeforeafirmactuallyneeds toembarkontheprocess,”he should have, but in certain respects having the people who gen- said. “I think it’s never too early. Even if you don’t need to go erate the most money running the firm too doesn’t make the through it yet, I think it’s a good idea and sometimes even better most sense in the world. You should be giving them the time and to do it when it’s not personalized to specific people, to just the freedom to focus on bringing the business in the door,”she develop an approach and process that the firm will use when the said. “That’s a little bit of a paradox in a way that everybody has time comes.” CL got to figure out how to navigate.” lduncan@lbpc.com Ten years ago, that paradox might not have been as prevalent, according to Zimmermann, who has a theory that firms have © 2017 Law Bulletin Publishing Company. Reprinted with permission from Law Bulletin Publishing Company.