The Generation Game

Professional firms need a robust succession plan to continue growing, says Richard Green.

Professional firms should recruit and develop talented, young people and have an effective succession plan in place if they are to carry on growing and enable older partners to retire.

Gone are the days when partners can wait until they are ready to retire and then sell the firm to a third party for significant sums of money. This approach rarely works anyway because once clients know the plan, they have little incentive to stay with the firm, making it difficult for the business to achieve its financial goals and enact its sale plans. Moreover, and certainly in today's economic environment, larger firms might be prepared to pay a small earn-out or take over the business, but at no real value.