Why succession planning is a vital part of being a leader

With increasing recognition of its role in preserving organisational culture, retaining critical knowledge, and ensuring business continuity, leaders are being urged to prioritise succession planning and keep it at the forefront of their strategic thinking.

Speaking with Lawyers Weekly, three firm owners share the significant risks associated with delaying succession planning, when leaders should begin considering it, and the key steps involved in building an effective and sustainable succession strategy.

Core responsibility for leaders

Modern firm owners are increasingly recognising succession planning as a vital element of long-term organisational resilience and sustained success.

Selina Nikoloudakis, principal of Divorce Legal, emphasised that the significant personal, financial, and emotional investment required to launch a business makes it essential to consider succession planning from the very beginning.

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“Becoming a business owner and establishing, in my case, a legal practice takes courage, determination, resilience and financial commitment,” she said.

“Given the effort that one takes to launch a business, it is only natural for business owners to consider succession planning from the outset, to ensure the longevity and resilience of the business over the long term.”

For Sally Nicholes, founder and managing partner at Nicholes Family Lawyers, effective succession planning is key to securing “continuity, stability, and long-term succession” – not only for the firm itself but also for the people who are part of it.

She explained that thoughtful succession planning enables firm owners to identify and prepare future leaders who will uphold the firm’s values and safeguard its long-term direction.

“Thoughtful succession planning allows leaders to deliberately shape the future of the firm by identifying and preparing those who will carry forward its values, strategic vision, and culture. The individuals chosen to step into key roles will not only influence the firm’s future direction but also play a critical role in preserving and strengthening its current reputation,” she said.

Beyond operational stability, Nicholes noted that such planning provides reassurance to all levels of the organisation.

“Importantly, succession planning goes beyond simply filling vacancies. It fosters a clear sense of direction and reassurance across the workplace, ensuring that employees, clients, and stakeholders are not left uncertain about the firm’s future,” she said.

“When integrated into leadership practice and approached with care, it enables smooth transitions with minimal disruption.”

Meanwhile, Annabel Griffin, founder and CEO of Hazelbrook Legal, expressed that she sees succession planning as essential, not only for providing a clear progression pathway for team members but also for creating opportunities and reinforcing the firm’s long-term direction.

“A key driver for me as founder and CEO of Hazelbrook is to provide clear and transparent progression pathways for our team. I see succession planning as an essential part of leadership, and as leaders, we need to be looking five, 10 steps ahead at all times – as stewards of the firm’s long-term resilience and relevance,” she said.

“Succession planning ensures continuity, it safeguards client relationships, preserves knowledge and systems, and protects the integrity of the culture we’ve worked hard to build, and which is critical to what we do.”

Griffin added that when team members can envision a future both for themselves and for the firm, it significantly boosts motivation and retention, ultimately strengthening the organisation from within.

“Just as importantly, it strengthens the team from within. When people see there is a future for them at Hazelbrook – noting this can mean different things to different people, but usually relates to clear pathways to leadership and growth – it drives retention, motivation and engagement,” she said.

“That directly contributes to long-term success for the business and for each of our team members.”

The risks of neglecting

Succession planning is often regarded as something to be addressed when the time comes. However, delaying or overlooking this critical responsibility can carry serious risks, ranging from talent loss to the eventual collapse of the business.

Nikoloudakis shared her firsthand observations of the consequences firms face when they fail to plan ahead, despite having significant potential for growth and expansion.

“Over the years, I have observed what started off as successful firms, with significant potential to grow and expand, wind up or be acquired by competitors because they have failed to consider a succession plan,” she said.

“As a result, I have seen them lose valuable employees, or employee morale and engagement within the workplace has decreased.”

This failure to plan, she explained, often sets off a domino effect that gradually erodes the firm’s foundations and undermines its prospects for sustained success.

“Consequently, what once may have been a successful firm is no longer successful, and there is no longevity because the valuable employees have moved on to either set up their own businesses or have been employed by firms with a clear succession plan,” she said.

One of the most significant risks of neglecting succession planning, as Nicholes highlighted, is its adverse effect on staff morale and talent retention, as employees begin to feel that opportunities for advancement within the firm are limited.

“The most significant risks of delaying or overlooking succession planning is the damage it can do to staff morale and retention. When there is little clarity or communication about future opportunities, employees may begin to feel that progression is out of reach or reserved for a select few,” she said.

Nicholes further emphasised that this issue is especially pronounced among “high-performing staff and early-career professionals” eager to develop their skills and advance within a supportive environment.

“If they don’t see a clear future or feel that their development is not being prioritised, they are more likely to seek opportunities elsewhere. In contrast, firms that actively invest in their people and demonstrate a genuine commitment to internal growth are far better positioned to retain talent,” she said.

Griffin also echoed this sentiment, warning that without a succession strategy, the loss of key talent becomes a real and recurring risk.

“There’s also a high risk of losing top talent. If people can’t see a pathway to progression (or a future that they are satisfied with), they may look elsewhere. And when senior people leave without having passed on their knowledge or developed others around them, it creates gaps that are difficult – and sometimes impossible – to fill,” she said.

Griffin also cautioned that delaying succession planning often results in rushed or reactive leadership transitions, which can disrupt both operations and team cohesion.

“Without a clear plan in place, leadership transitions can be rushed, or even worse, reactive. This can lead to instability and uncertainty for staff and clients alike. Of course, when there is an unexpected change in the team, that can come as a shock,” she said.

“The key for leaders is to show in that situation that the matter is in hand and there is a plan moving forward – this is all about separating the reaction from the response. And further, showing that more often than not, change is a necessary part of business, and one that often leads to opportunity.”

“There’s also a high risk of losing top talent. If people can’t see a pathway to progression (or a future that they are satisfied with), they may look elsewhere. And when senior people leave without having passed on their knowledge or developed others around them, it creates gaps that are difficult – and sometimes impossible – to fill.”

When to start? Now.

For firm owners unsure of when to start thinking about succession planning, Nikoloudakis believes the answer is simple: from the very beginning, alongside the development of the business plan.

“Setting up a business requires a business plan. Business owners should start turning their minds to succession planning and implementing a succession plan strategy from the outset, when they are conceptualising the business they wish to run. Of course, like any plan, the succession plan can be reviewed and modified on a regular basis,” she said.

Nicholes acknowledged that many firm owners are hesitant to introduce succession planning early on, often viewing it as a “threat to one’s influence. However, she argued that succession planning isn’t a threat but “an opportunity to shape a lasting legacy”.

According to Nicholes, building an effective succession plan requires identifying which key leadership roles are likely to become vacant in the future and developing internal talent to step confidently into those positions.

“An effective succession plan begins by identifying key leadership roles that are likely to become available in the future, and recognising individuals who show the potential to step into those positions,” she said.

“The ideal candidate doesn’t need to be ready to take on the role immediately, but should demonstrate the capacity to grow into it with the right support, training, and mentorship.”

Griffin echoed this perspective and advocated for a complete reimagining of what succession planning means in today’s leadership landscape.

“I think it’s important to reframe succession planning as a mark of strength, not weakness. Being seen as ‘replaceable’ shouldn’t be feared as being indispensable is a risk in itself. A good leader does not make themselves the centre of things, which can be hard, as there are some key and critical times when it’s essential to step in and take the reins,” she said.

“Succession planning should begin early – ideally when you first step into a leadership role, as although it’s probably when you’re least concerned about it, it’s when you’re most likely to have the clarity and space for considering it.”