Succession Planning

Having a Working Partnership For a Transition Period

Maxwell is a very successful sole practitioner who has been in the business for 31 years.  Over the years, success had required adding professional and support staff, but he was still the central figure in almost all of the client relationships.

His personality made sole ownership desirable.  He has thoroughly enjoyed building the business and developing close relationships with clients.  But now his interests have changed.  At age 67, he wants to make sure that the accumulated value in the business is enjoyed by him during his life and is also available to his family. To successfully transition his business, he needs to work closely and cooperatively with a successor.

One of his best advisors had already left the firm to go out on her own after the dates implied by the “I’ll retire in 5 years plan” had come and gone.  Maxwell felt frustrated by the time and energy he had invested in that relationship.  He wasn’t sure she was ready to be accepted by the clients, but if he is honest with himself he admits that he had not taken many steps to implement the plan they had discussed. He feels some reluctance to give up control; after all, this was a business that he had worked so hard to build and his identity was closely tied to his role as business owner.

Recently, he met a younger planner with a small practice in an adjacent market with whom he has had many enjoyable conversations.  They have talked about succession planning broadly over lunch, and the other planner indicated an interested in growing by buying. Maxwell doesn’t want to waste time going down a road that leads nowhere, so he hired us to get any issues out on the table early.  Anthony, the potential buyer, does not have any transaction experience, so he was also eager to get independent advice. Prior to meeting as a group, each partner took an assessment of behaviors and motivators, and answered a short questionnaire about their objectives, hopes, and doubts about this partnership.

Key issues:

  • We helped each party separately prioritize their interests and alternatives so they can better negotiate the areas of possible agreement.
  • We spent time in the facilitation identifying common interests that the founder and the successor share and used that information to build a transition plan.
  • After sharing the respective working styles and motivations of the two potential partners, we explored how they could best work together in the transition, defining, for example, what changes to the practice will be acceptable during that time and clarifying roles/responsibilities.
  • We helped them agree on the key aspects of the “client experience” that will acknowledge the founder’s contribution but also set up the successor’s role as decision-maker; they were also prepared to more effectively communicate with their branding/marketing team.

Although the deal terms were an important part of the negotiation, what set up this business sale for ultimate success was the process that fostered mutual respect and transparency between the parties.  They found they were able to engage productively when issues inevitably arose during the transition period.

The partnership resource
  • Form strong partnerships
  • Resolve partnership conflict
  • Reinforce your partnership dynamics


Follow TPR on Twitter


Please enter your email to receive updates
and notices of events: