Because many firms have some part of their compensation – and often retirement or ownership as well – tied to client book, it is important to lock in a fair retirement based on how the firm is operating today.
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The reason is that when creating a strong succession plan, you are likely to ask all partners to agree to some changes. If you want to create an open dialogue with a senior partner about giving up some of his or her book for the betterment of the firm, which is also typically synonymous with asking that partner to give up some of their security regarding annual compensation and even more important their internal power, it is critical to give them confidence that their past efforts are being considered when creating the reward structure going forward.
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