Beyond retirement — How succession planning is reshaping the future of high-street legal firms

Peter Ranscombe looks at the factors that high-street law firms need to consider when it comes to succession planning.

Few actors enjoy careers as diverse as Brian Cox. From playing Colonel William Stryker in the X-Men comic book movie sequel through to treading the boards at the Edinburgh International Festival this summer as economist Adam Smith’s ghost in Make It Happen, the Dundonian star oozes versatility.

Nowadays, Cox is most closely associated with Succession, the Sky television series in which he portrayed a media mogul whose offspring competed to replace him as head of the family empire. The dysfunctional clan’s exploits ran for four series from 2018 to 2023, netting Cox a Golden Globe in 2020.

In real life, succession planning is slightly less colourful – especially for high-street law firms. Yet the dynamics seen in many family businesses are often echoed within legal practices.

“It’s not easy to leave a law firm for the same reason as a family business – if you’re the senior person, then chances are your work is all you’ve ever known,” observes Martin Stepek, who ran the Scottish Family Business Association for 20 years and is now a consultant with the Family Business Partnership. “Lawyers are notorious for overworking themselves, so they don’t have a life outside work and therefore they’re scared to leave. It’s almost like work becomes a crutch.”

As well as his insight into succession planning at family firms, Martin also has experience in the legal sector, having gained his bachelor of laws degree from the University of Strathclyde and later working as director of culture and communications at Wright, Johnston & Mackenzie. This month, the Family Business Partnership is launching ‘The Path’, a personal development course that uses science-based mindfulness to help with issues including succession planning.

“High-street law firms need to consider the commercial side and the financial side of succession planning,” Martin explains. “On the commercial side, it can take four or five years of planning to make sure the clients are comfortable with whoever will be taking over the day-to-day work from the partner who they’ve come to know and trust.

“On the financial side, firms need to make sure that the lawyer or lawyers who are leaving have the financial security to finish working. If they don’t have a pension in place, then they may not be able to afford to leave. In my experience, letting someone go part time may cause issues because they become comfortable and even less likely to leave.”

How ‘culture’ fits into mergers and acquisitions

If there’s no one within the firm to buy the business, then Martin highlights the need to ensure the firm’s culture is a good fit for an outside buyer. “Every organisation or family has a culture, but it’s often unspoken or unwritten – the problem for many law firms is that they don’t know explicitly what their culture is,” he points out.

“Takeovers or mergers are transactional – and it sounds very woolly to start talking about ‘culture’ because lawyers’ mentality is often, ‘We don’t do emotions, we do deals’. But if there isn’t a good cultural fit between two firms, then the deal won’t work and they may lose staff and clients as a result.”

Culture is always at the front of Jacqueline Law’s mind when it comes to mergers and acquisitions. Aberdein Considine’s managing partner has overseen a string of deals during her 11 years at the helm as the firm has grown from its Aberdeen roots to encompass 21 offices throughout Scotland and the north of England, with names including A&S Ireland, Muirhead Buchanan and Russel & Aitken all coming under its wings.

“We’ve completed five or six mergers with smaller practices – and we get a lot of approaches,” Jacqueline says. “There can be a tendency for a merger to happen, but for there then not to be any follow-through.

“There needs to be a huge amount of work post-merger to blend the cultures of the two firms, carry out training and look after the client bank. We don’t just do an acquisition, we then follow through too. I find them to be a significant amount of work.

“Some of the mergers we’ve done, and particularly our last one, which was Russell & Aitken in Edinburgh, have been super-mergers. Diane Paterson, the managing partner there, has been an absolute pleasure to work with.

“Initially, she came on board afterwards with a view to retirement, saying she might do six to 12 months. Three years later, she’s still with us as a consultant because she’s enjoyed the experience and she’s been great to work with.”

Commercial drivers linked to cultural fit

A strong cultural fit and clear commercial drivers go hand in hand when Thorntons managing partner Lesley Larg is looking at deals. “Mergers and acquisitions have been a big part of Thorntons’ heritage, stretching right back into the 1970s and 1980s,” she explains.

“We have a strong track record of successfully integrating other firms into Thorntons and so, when I took over as managing partner, I wanted mergers and acquisitions to continue to be part of how we grow the firm, alongside organic growth and lateral hires. Having experience of acquisitions also meant we were able to act quickly when other firms went into administration, including Morisons and Pagan Osborne.”

Thorntons is approached regularly by smaller firms that are involved in succession planning. “I take my hat off to partners who run law firms of any size,” Lesley says. “If you only have three or four partners, then you need to do all the compliance work, be your own data protection officer and lots of other jobs, all while still servicing your clients.”

Two recent deals illustrate the different reasons for firms approaching Thorntons: Edinburgh’s Stuart & Stuart came on board in 2022 when senior partner Chris Stuart was approaching retirement, while the young team of partners at Macnabs wanted to become part of a bigger firm earlier this year to fulfil their ambitions to invest in artificial intelligence and other technologies.

From Thorntons’ perspective, the Stuart & Stuart deal allowed the firm to expand its private client practice, while Macnabs filled in a geographical gap for it in Perthshire and Stirlingshire. “Ultimately, it comes down to the cultural fit and the commercial drivers – we take time to get to know the partners and, if they share our golden rule of looking after people and clients, then we know they’ll be a good fit,” adds Lesley.