Change is often difficult. Most likely the biggest hurdle of succession at your firm will be faced by the retiree. After a long career, the individual should be encouraged to focus on what is coming next, what they’re moving toward – rather than what they’re leaving behind.
As the large, influential Baby Boomer generation prepares to retire from the workforce, many professional services firms will face the challenge of effectively communicating the transition process, internally (to staff) and externally (to clients and referral sources). Just as these transitions should be handled delicately – and somewhat uniquely – so should your communications. Since there will be intricate nuances around different aspects of each transition, it will be very helpful if the message your firms sends is one of confidence and sincerity for all involved. This guideline includes an overview of the types of communication that should be sent and a recommended timeline.
It is recommended that there be in place a Succession Planning Committee, prior to these activities. The Committee should consist of senior management (1-2 Partners, Managing Partner) and one or two members of senior managerial staff to work with the retiring partner to list all clients in proper categories of overall benefit to the firm (“A” clients are top revenue generators, long-term clients that have potential for additional services and meaningful introductions down the road, etc.; “B” clients should also be listed regarding revenue tier, potential for growth, etc.; “C” clients and “D” clients, etc. “D” clients may include 1040 clients with lower revenue and even may include those clients whose time it might be to discontinue serving and recommend another firm. (“D” clients require no more than a letter 6-8 weeks prior to the retiring partner’s last day in that position).
2 Year Mark
We recommend that communication begins at the 2 year mark, prior to the date of retirement. Knowledge is power, and the more people that understand that a transition has begun, the more support the endeavor will have.
Internal Communication to All Staff – At this point, an internal communication (e-mail or verbal announcement at a firm event) should be made concerning the retiring shareholder. This communication should be one of acknowledgement and appreciation for the shareholder’s contribution to the firm during his/her tenure. We strongly recommend that specific achievements should be highlighted as well as any other meaningful contributions made, as well as a testimonial/s from the Managing Partner, significant client or anyone else deemed appropriate. The communication might also include a personal statement from the retiring partner sharing what their plan is after retirement (will this individual still perform duties for the firm or will be there a new chapter for this individual).
External Communication to “A” Clients – At the 2 year mark, Top “A” clients should be informed. This communication should be done in person by the retiring partner and should also include a discussion about the partner that the transitioning partner is recommending takeover the engagement. This should be a collaborative conversation where the “A” client feels they have a choice and are agreeing that this new partner be assigned to their engagement.
Soon after this conversation, a follow-up meeting should occur, whereby the new relationship partner is present and it’s acknowledged and approved by all. This will confirm to all parties, that a transition has, in fact, begun. Moving forward, it will be up to all involved to support the transition of knowledge and duties involving these top clients’ engagements.
18 Month Mark
It goes without saying that the successful transition of the firm’s “A” clients is imperative to the succession plan process – ensuring the firm maintains its revenues and can abide by any compensation arrangement previously agreed upon by the shareholder concerning the retiring partner’s buyout.
External Communication to “A” Clients – “A” clients should receive a phone call or personal communication at this time from the Managing Partner to confirm that they are content with the proposed transition plan and newly assigned partner (as long as the MP represents an authoritative, neutral figure in the relationship. If not, another shareholder might make this contact).
External Communications to “A” Referral Sources – At this time, the retiring partner should compile of list of referral sources, categories by “A” and “B”, dependent on the volume of work referred and the potential of future collaboration. The retiring partner should also reach out personally to these “A” referral sources, by way of e-mail, letter of phone call, to announce his plans for retirement.
The retiring shareholder should consider making a meaningful introduction of a colleague to the referral source, if no other relationship exists; now is a good time to expand the relationship to include more representatives from each side of the firm. Top referral sources should be offered some type of “Meet & Greet” which can also act as an event by which the retiring partner is honored.
Internal Communication to Staff about “A” Clients – “A” clients deserve priority client service and this includes all staff knowing who is serving them (especially reception, mailroom, etc.). A list of all “A” clients who are being transitioning should be distributed, along with the newly appointed relationship manager/partner.
Identification of Issues/Educational Requirements needed to Ease Transition of Top Clients – at this point, it should become clear of any gaps in expertise or rapport that have not yet been fulfilled. In order to ensure a smooth transition, other clients may have to be switched in the mix, or certain professionals may be selected to commit to earning a designation or enriching their educational requirements to fit the need of a certain top client or niche. Now is the time!
It is also at the 18-month mark that regular (we recommend quarterly) internal meetings take place among the members of the Succession Plan Committee and the retiring partner – as well as other, appropriate professionals, to ensure that these client relationships are, in fact, being transitioned – that professionals have been identified – have been spoken to – and have agreed to take over the responsibilities around these clients.
Note: It is recommended that specific parameters around a smooth transition of these clients be addressed in the contract/ agreement concerning the retiring partner (penalties for not adhering to the communication guideline might be included).
12 – 9 Month Mark
External Communication to “B” (and/or “C”) Clients – Starting at the one year mark, “B” clients should receive communication about the pending transition. Although there may be some clients with special circumstances that would require a special “touch” here – either by the retiree or the impending new partner on the engagement (both of which should be honored, if at all possible), we recommend that this initial message should be sent out on behalf of the Managing Partner, tapping the content sent to staff in the initial announcement sent, highlighting the contribution of the shareholder and offering that the retiring shareholder will be contacting them to arrange a follow-up meeting to discuss / collaborate an acceptable transition plan.
How that follow-up will be handled should be discussed openly and thoughtfully – either at the quarterly Succession Plan Committee meetings – or carefully considered by the retiring partner and an objective supporter.
External Communications to “B” Referral Sources – At this time, the retiring partner should compile of list of referral sources, categories by “A” and “B”, dependent on the volume of work referred and the potential of future collaboration. The retiring partner should also reach out personally to these “A” referral sources, by way of e-mail, letter of phone call, to announce his plans for retirement.
Internal Communication to Staff about “B” (and/or “C” Clients) – A list of all “B” clients who are being transitioning should be distributed, along with the newly appointed relationship manager/partner.
6 Month Mark
The only communication that should need to occur during this time is one-on-one meetings with the retiring partner and the new team of professionals serving his clients. By this time, it should be understood that the retiring partner is no longer serving in the same capacity and should be making him/herself disposable to the staff to mentor, advise and assist in serving the clients and easing the transition process.
2 Month Mark
External Communications to “C” and “D” Clients – A final communication should be sent to those left on the client list, miscellaneous referral sources – and everyone else. The letters sent to the “C” or “D” clients (depending upon the size of the client list or how you have chosen to categorize them) can be standard. For those clients you have decided to deter in renewing, you may include a list of three other CPAs to recommend them to. Now would be the right time to fire those less than desirable clients).
Press Release / Media Release – Also a Press Release should be sent at this time – and, if appropriate, this might go along with an invitation to whoever will be asked to attend some form of retirement event that might be held. (This can range from an elegant party to an informal lunch but it’s important that these milestones be celebrated at some type of event to help commemorate the transition – as well as celebrate all the hard work that’s taken place!
The type of work that is necessary for a successful succession plan will require retiring shareholders to embrace very new territory – “letting go” of many years of deeply ingrained behavior and beliefs. A smooth transition will depend on the readiness, willingness and ability by everyone involved. The most important first step is to create a realistic, thoughtful plan of what needs to be done, how it will be done and when it needs to gets done.
TIERNEY Coaching & Consulting, Inc.’s consultants and life coaches are working with accounting and law firm partners at all levels of transition and have done so for years. Whether it be the newly appointed Managing Partner, future targeted Managing Partner, a small group of the next generation of identified leaders of the firm or professionals who are reaching the mandatory age of retirement at their firms, we know how to help ease the transition process.
We offer individual, one-on-one coaching with retiring professionals as well as group coaching for succession plan committee members, to openly and honestly identify any obstacles or barriers that get in the way of a formerly agreed-upon process or a timetable that has gotten side-tracked. Once we have identified the barriers to the process, we can assess and overcome these obstacles in a way that meets the comfort zone of the individual/s involved.