Succession Management in Professional Services Firms

If you run a professional services firm, you are likely thinking about whether or not you need to kick off a formal succession planning program, or whether it is time to refine the program you have in place. Before you take the plunge, here are six pitfalls to watch for that are unique to professional services firms. Risk to clients: A key part of succession planning is structuring job assignments that address development gaps. In professional services this must be managed carefully, so employees who are learning are not putting client projects at risk, and so clients are not being double billed when a mentor is assigned to correct someone's work.

Talent crunch: In a professional services firm the senior partners, or senior project leads, are typically over-resourced on projects because they have specialized skills that are in high demand. This is especially true for senior engineers, tax professionals, and lawyers with specialized training. The Catch 22 is that these are the same people who would make excellent mentors for successors. This puts strain on the organization because on the one hand, you need the senior people to mentor, yet at the same time, you do not want to over burden them to the point that they consider leaving the organization for greater work-life balance.

Partners who don't leave: Given the partnership model in many professional services firms, partners often stay with the business for a long time. This limits the career options for the next generation of leaders who want to fast track their career.  If up and comers feel like their career is being stalled due to slow turnover at the top, they may opt to leave for larger firms.

Technical leaders promoted into people leadership positions: Right now there are shortage of people who can fulfill the senior leadership responsibilities typically required in a professional services firm: sales, people leadership, client delivery, and technical responsibilities.  Given this, it can be tempting to promote a technical person into a senior leadership role, despite them showing limited potential to fulfill all the responsibilities.  Unfortunately, there is a high probability they will fail.  And, once you have promoted them, it is hard to reverse the decision.

High Potential Politics: As part of a succession program certain employees are often tagged as high potentials.  The firm invests more heavily in high potential’s skill development to address the succession gap.  In a professional services firm whether or not to call some people high potentials, and not others, needs to be thought through carefully.  You want to ensure that future leaders know they are being considered for upcoming vacancies, yet you don’t want to alienate solid performers who may not be likely to progress.

Senior Leaders Feel Threatened - For senior leaders who have invested many years in the firm, succession planning may be viewed as a threat. If senior leaders feel pushed out of the firm, or that their security and identity may be at risk, they may exhibit dysfunctional and protective behaviours and not truly support leadership development efforts.

For these reasons, it is important to have a well thought out succession management strategy and to proactively identify and address the issues that could derail your program.