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It's a touchy subject: How do you plan for the next generation of firm leadership while the current generation is still here, alive and kicking, and not quite ready to think about "moving on" yet? Whether you are planning for your own firm's future (or helping your clients make successful transitions with their businesses) it is never too early to begin putting a succession plan in place. And if you already have a plan, it is important to review and update it frequently to reflect any changing realities in the firm. In this way, the current generation of leaders will fulfill their fiduciary responsibility to ensure an orderly change over.

Time marches on and succession is inevitable, whether through planned retirement or the stepping down of senior-level firm leaders. Or under crisis mode, in the unfortunate death or illness of key players.

Being unprepared for the transition almost guarantees that your firm will be in for a rough ride. This is true for any business, from the three- or four-person office to the multi-million dollar enterprise. And succession planning is an endeavor not just for the managing partner or company CEO, but for all key players and rainmakers who keep your business thriving today.

Assuming that your firm decides not to sell or merge with another firm, your succession planning focus will be centered around developing people within your existing firm, or bringing in outside leadership talent.

Often, firms have the financial component of their plan in place, but have not seriously addressed the all-important "people part" of succession planning. A transition in leadership will ripple out and affect all areas of your firm, so this is no small undertaking. Here are some basics to build into your formalized succession planning process:

Incorporate your succession plan into your overall firm strategy – Succession is not an isolated event. As your management team makes short- and long-term plans for the firm, include succession in the big picture. This is true even for short-term planning because you never know when there might be a sudden need to have a new leader take the reins in the event of a death or illness.

Identify the key behaviors, skills and values ideal leaders in key positions must possess – You know what works and what doesn’t work in your firm. Put it on paper and begin fine-tuning what your ideal leadership team looks like.

Review your current talent pool for strengths and weaknesses – Once you know what each position requires, take a hard look at what is solid and what is missing. Are there any second-string leaders who are ready to step up to the plate? Are there some future leaders in your midst? Are there any players who would never make the leadership cut? What does this mean for your firm now and in the future?

Create a plan to build skills of those partners who are potential future leaders – A good leader possesses more than just "natural" ability. You will need to groom and train your leaders. The upside is that during the process, they will become even stronger players for the short-term, and you will keep them motivated to stay with your firm longer.

Keep succession planning public, not relegated to hushed discussions – Nothing creates worry and mistrust like a closed door in the administrative wing of your office. If everyone is in the know all along, you can ensure an orderly transfer of power by all-important buy-in and keep valued partners and employees who fear the transition could impact future compensation, career paths, and even their own positions.

Plan for the transition of client relationships – Unfortunately, firms too often consider transition and internal matter and end up missing this critical planning item. The good plan asks: How will the transition affect clients? How will you ensure that good client relationships remain intact? What is your plan to prevent disruption of service?

Incorporate coaching and leadership development – Everyone needs to improve, even your star performers. Leadership development and coaching builds self-esteem, enhances performance, establishes an accountability culture, and helps to align your future leaders' values with the firm's core values.

While succession planning may be focused on certain individuals within your firm, remember that your firm itself has a life, and prolonging your firm’s life requires an excellent strategic plan for transitioning the firm’s leadership to future generations.

For a further general overview of succession planning, click here:
http://www.familyestate.com/main/business.htm

Link to this article for "horror stories" of succession planning gone wrong:
http://www.businessweek.com/magazine/content/05_02/b3915658.htm

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