By Guy Livingstone
Executive Summary
Succession planning at professional services firms addresses client transitions, equity buyouts, and leadership development -- but almost never addresses the long-term care costs that can disrupt the entire process. A partner who needs LTC before a planned transition creates financial and operational chaos that well-drafted succession plans weren't designed to absorb. Group LTC provides the funding mechanism that makes succession plans resilient to care-related disruptions.
Frequently Asked Questions
Why don't most succession plans address long-term care?▸
Traditional succession planning focuses on planned transitions like retirement, death (covered by key person insurance), and sudden disability (covered by buyout provisions). Long-term care needs arrive gradually and don't fit neatly into these categories, creating a gap that most firms haven't anticipated.
What happens to a firm when a partner has an unplanned LTC need?▸
The firm experiences a slow degradation: missed deadlines, reduced client responsiveness, and cognitive lapses that colleagues notice but nobody addresses directly. This ambiguous period can last months or years, with the firm carrying a partner at reduced capacity while clients sit in limbo and costs accumulate informally.
How does group LTC coverage change the succession planning conversation?▸
Group LTC creates a clean separation between care funding (handled by the LTC policy) and the partnership transition (handled by the succession plan and buyout agreement). Without this separation, firms often feel obligated to extend accommodation beyond what the partnership agreement requires because the alternative is pushing a colleague into financial crisis.
Can group LTC help with partner retention?▸
Yes. Group LTC with guaranteed issue access is a retention tool because it cannot be replicated on the individual market. A partner over 55 who leaves a firm offering group LTC may not qualify for individual coverage elsewhere, making it a meaningful factor in lateral recruiting conversations.
How much does group LTC cost for a professional services firm?▸
Group LTC typically costs $25-50 per partner per month, which is negligible compared to the cost of a single unplanned LTC event disrupting the firm's succession plan, client relationships, and partnership economics.
Which firms are adding group LTC to their succession planning?▸
Firms that have seen what happens at other practices when a senior partner's LTC need arrives unplanned and unfunded. For managing partners thinking about the next five to ten years, group LTC belongs alongside key person insurance, buyout funding, and client transition planning as core succession infrastructure.