As a small law firm owner thinking about retirement, you are likely looking to your own associate to be your successor. This decision is not one to enter lightly, however.
Before you make anything official, you need to consider whether your associate has the talent and the skills to pull it off. Just because the associate handles files well has no bearing on whether they can successfully operate a law firm.
The skill set required to be an effective law firm owner is quite different from that of a good practicing lawyer. Here are the most important skill sets to consider when vetting any successor, current associate or otherwise.
What are your answers to the questions posed here?
If you can answer both questions with either a “yes” or “maybe,” then you should promptly assess where the gaps exist. Then you need to make and execute on a plan to ensure the associate receives the necessary training and mentorship.
If your answer is “no” to either question, stop dreaming about an insider deal. Pursuing one will be a fool’s errand.
Most deals with insiders are at least partially funded by the profits of the firm going forward. A successor who cannot manage or market a firm will simply not be profitable enough to pay you out. If you find yourself in this situation, the time is now to consider realistic alternatives. Typically, those include selling the practice or taking your practice to another firm and join it in an “of counsel” role.