2024 Fall Issue of Urban Land - 102

vital in helping to maintain an even keel
during the transition.
Buy-in-Any potential new leader, especially
one coming from outside, must win
the support of owners, senior leaders,
and the entire team. Not everyone will be
pleased by the decision, particularly senior
people who may feel passed over. So, it's
essential that the newcomer establish,
firmly and clearly, what he or she brings
to the company, and why that unique
leadership is now necessary to ensure
future growth and earnings. Without such
buy-in, the risk that a firm's best talent
might head for the exit grows.
Implications of not planning
Proactive succession planning takes time
and can be a struggle, but the consequences
of not doing it can be devastating.
Emergency or contingency succession
plans are designed to deal with
unexpected turnover, such as a sudden
death, disability, or departure. Although
many companies have legal prescriptions
covering ownership or partnership stakes
in those instances, the policies often fall
short in defining a clear line of succession
in the event of an unplanned vacancy. The
result can easily lead to a power vacuum
and disastrous mismanagement.
In the worst case, a third- or fourthgeneration
CEO might have no option
other than to sell the family business-all
because a structured plan for succession
was not implemented in time.
Choosing a worthy successor is not an
easy task, especially for someone trying
to preserve the family real estate business
for another generation. But with many
people of baby boom-age range now
retiring, a solid succession plan is more
important than ever. It takes time, money,
and a lot of hard work to find exactly the
right person, but making that investment
is necessary.
Finally, the emotional component of
succession should not be ignored. It can
be a trying time for everyone. Even when
the desire to step down is genuine, following
through with goodwill during the
transition can be difficult on all sides.
Time and again, we have witnessed
outgoing leaders who are unwilling-or
unable-to walk away from their day-today
roles once a new successor is finally
installed.
It can be a tricky environment to navigate,
and the impact on the bottom line
can be harsh if it's botched. But dealing
with it successfully, up front and with
candor, helps ensure the incoming leader
will be well primed to take over and continue
building on the predecessor's legacy.
UL
ELLEN KLASSON, a managing director who leads RCLCO's
talent advisory practice, works in the Washington, D.C. office.
CHARLIE HEWLETT, a managing director who leads RCLCO's
management consulting practice group, is also based in
Washington, D.C.
ALLEN MATKINS PROVIDES A FULL RANGE OF
LEGAL SERVICES TO THE REAL ESTATE INDUSTRY.
We assist clients with their development, f inance, capital
markets, acquisition, leasing, joint venture, litigation,
construction, bankruptcy, environmental, corporate, tax
planning, securities, and employment matters.
102
URBAN LAND
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2024 Fall Issue of Urban Land

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