Succession Planning for Lawyers: Before the Founder’s exit by Gbenga Oyebode MFR Managing Partner, Aluko & Oyebode

1. Succession Planning for Lawyers: Before the Founder’s exit byGbenga Oyebode MFRManaging Partner, Aluko & Oyebode35 Moloney Street,Lagos

2. Introduction The Nigerian Trend The Nigerian legal practice has been characterized by: • Dominance of sole practitioners • Inability/refusal/failure of legal practitioners to train successors • Lack of partnership track within many law firms This has led to the presence of only a few law firms, versed in various aspects of the law, that are able to compete both locally and internationally. This presentation focuses on the need for succession through partnership as a means of sustainable development for the Nigerian law firm.

3. Firm Succession Succession Benefits Succession creates the opportunity for a successful legal practice, characterized by: • Presence of a broad scope of expertise and depth • Ability to compete on a larger scale • Improved knowledge/skills acquisition • Increased revenue for founders and successors • Sustainable partnership

4. Firm Succession in Nigeria The application of succession principles in our legal environment has led to: • Increase in the number of Partnerships • Increase in law firms that are recognized in international circles • Increase in better business opportunities for law firms • Increase in revenue from diversified sources, using diversified skills

5. Achieving Sustainable Succession • Vision • Paradigm Shift • Managing Succession through Structure • Recruitment • Challenges

6. Vision The first step to sustainable partnerships is to envisage it. Therefore the law firm’s vision should: • Be sustainable and geared to keep the firm alive and thriving • Endorse the admission of partners to survive the exit of the founder/other partners • Promote healthy competition on a local and international level • Assure potential partners of a stake in the firm’s existence.

7. Paradigm Shift • Appreciation of the benefits of succession • Willingness to build a succession-structure that: Creates an enabling environment for specialization Views successors/partners as investors in the business • Willingness to manage challenges • Willingness to exit at an agreed date

8. Managing Succession through Structure • Relationships between the founder and other partners should be governed by a comprehensive Partnership Agreement • Recognition of each Partner’s strengths/contributions • Creating a balancing act • The Partnership Agreement should provide for admission of new partners and withdrawal of partners, as well as the possible involvement of retired partners. • Documented Firm procedures that are independent of the founder/partners and govern every member of the firm • Separation of the core legal from the administrative functions of the firm • Establishment of an independent accounting unit/Accountability • Appropriate Technology Deployment

9. Staffing Issues There should be a recruitment plan which makes provision for: • Recruitment at different levels within the firm • Recruiting persons with similar vision • Early identification of potential Partnership material • Staff retention/Meritocracy • Mentoring staff to become potential partners • Staff welfare to include financial and promotional incentives In addition: • Employees must be able to fulfill both the firm vision and their personal vision within the firm • Employees must be able to chart a career path within the firm • Employees must be able to identify with the firm’s rewarding principles and achieve the highest heights possible within the firm

10. Challenges Financial Considerations • Sharing formula-employees wages, partners benefits etc • Cost of Recruitment and training to firm standards • Firm Expansion and cost implications • Macro-economic Impact on decision making

12. Conclusion • There are few firms in Nigeria where new partners have succeeded the founder(s) of the law firm. • Balancing Act is required in Partnerships • There is need to understand the use/application of Partnership Agreements in the sustainable development of any law firm. • The key to continued existence lies in building and proper management of the succession/partnership structure.

13. Thank you