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Legal Department Succession
Management Series

The following is Part I of a three-part series on in-house legal department succession management. The series is designed to give the in-house practitioner a practical set of tools to evaluate, develop, and plan for succession within the in-house legal department.

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Part I: Evaluation of legal department succession planning needs

by Sterling Miller

It’s no secret that the population is getting older. Here in the United States, the baby boomer generation is starting to retire. As they do so, many businesses are finding themselves caught short with respect to succession management, i.e., failing to properly prepare for the leaving or retirement of a senior executive like their general counsel. In fact, a recent report from Thomson Reuters shared that only a quarter of legal departments are planning for the generational shift. This lack of planning can lead to big problems down the road.

Succession planning can be broken down into three parts: 1) evaluation of succession needs; 2) development of succession talent; and 3) putting a succession plan into place. This discussion will focus on part one – how to evaluate succession planning needs. This evaluation comes down to four factors:

  • Evaluation of the short- and long-term legal needs of the company
  • Evaluation of the short- and long-term needs of the legal department
  • An honest evaluation of the likely turnover in the legal department over the next one, three, and five years, along with a continual working knowledge of who is getting to retirement age
  • Working with human resources department professionals (to raise the profile of the issue)

Evaluation of the short- and long-term legal needs of the company

The very first step of succession planning begins with evaluating what the company will need in terms of legal services over the short term (the next one to two years) and over the long term (within five years). This is true because you cannot properly plan staffing needs until you understand what types of legal services are needed. You must go into this process without any preconceived notions of what the company will need, i.e., you cannot focus only on what has happened and how the legal department is structured today. Instead, you need to start digging and figure out where the company is going and whether there are legal issues on the horizon that you need to plan for (even if they do not come directly from the plans of the company). The place to start is with the strategic plans of the company and your business partners.

Evaluation of the short- and long-term needs of the legal department

Once you have gathered the strategic information from the business, you need to look at it in terms of legal needs. For example, if you see an uptick in mergers and acquisitions, this means your department’s M&A skills will be needed and potentially expanded or enhanced. The key is to do an exhaustive look at the most likely legal skills your department will need over the next five years.

After you have a list of needed skills, you will set them out by category, e.g., Commercial Agreements, Data Privacy, Antitrust, etc. Then you will need to assess how the current skill set in the department matches up with the list of needed skills. Most likely you’ll find that some areas are well covered and some will need to be bolstered.

Evaluation of the likely turnover in the legal department

The next step is to develop an honest evaluation of the likelihood of departures from the department, in particular spotting those baby boomers nearing retirement age, as they are the most likely to depart and will need to be replaced. It is a good idea to work with HR on forecasting when members of the department will likely begin looking at retirement. You do not want it to be misconstrued as an effort to swap out older people for younger people in violation of age-discrimination laws.

Additionally, you need to evaluate those in the department who are highly valued and a retention risk, i.e., who are dissatisfied for some reason (e.g., lack of promotional opportunities) or who might have skills in high demand and potentially be a good target for another legal department to poach them. Working to recognize who these individuals are will help you plan and take steps around retention and development. On the other hand, and as we’ll see when we discuss Part II (development), there may be people who are dissatisfied but not highly valued, i.e., need to be managed out vs. retained.

The takeaway here is that you need a constantly developing process to know at any point in time who are the people in the department who are likely to depart in the near term and over the next several years – regardless of reason.

Work with the human resources team

As mentioned, it can feel a bit overwhelming to focus on succession planning, especially when there are so many other priorities. A great resource is the human resources (HR) department. They will have skilled professionals with access to information and tools to make the evaluation and planning process much easier. Plus, they will help you tie succession planning in the legal department to succession planning for the company overall. Finally, if you are the general counsel working with HR, the logical next step is to begin to develop a succession plan for when you depart.

Successful succession planning for the legal department begins with an evaluation of the plans for the business in the short term and over the longer term. From this, you can identify the skills the legal department will need in order to help the business meet those goals and plans. Knowing what skills you need leads to evaluating the skill set of the current members of the team and understanding where there are gaps and how soon those gaps might become an issue. You must also understand which members of the legal team are likely to department over the next five years and what skills will you need to replace them or what priorities will you meet if you suddenly have an open position.

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Sterling Miller spent over 20 years as in-house counsel, including as general counsel for Sabre Corporation and Travelocity. He currently serves as Senior Counsel for Hilgers Graben PLLC focusing on litigation, data privacy, compliance, and consulting with in-house legal departments. He is CIPP/US certified in data privacy. You can follow his blog “Ten Things You Need to Know as In-House Counsel” at www.TenThings.net and follow him on Twitter® @10ThingsLegal. The American Bar Association is publishing a book of his blog posts later this year/early 2017. His first book, The Evolution of Professional Football, was published by Mill City Press in December 2015 and is available on Amazon® and at www.SterlingMillerBooks.com.

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