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This article is about succession planning. But it’s not the kind of succession planning you’ve ever seen discussed in Agency Sales magazine.

Let me explain. MANA gives lots of attention to succession planning that helps representative firm owners thinking about retirement to sell their firms and transition to new owners.

That’s the kind of succession planning that is done when a relationship is ending.

But there is another kind of succession planning that is done before a relationship even starts. And it is that beginning-of-the-relationship succession planning that I discuss in this article.

This beginning-of-the-relationship succession planning happens before a representative firm and a new principal launch a new relationship. That’s when the representative firm has to think not only about launching this relationship, but also about what will happen in the distant future when this new relationship eventually ends.

Succession planning, in this case, is this representative’s plan to protect his or her rights when there is a succession of this principal to a new path to market.

This aspect of succession planning asks the “what if” questions now about what that separation in the far future will look like if the principal switches to a successor: another representative firm, a direct salesperson, or even “we don’t need a salesperson, we can handle this from headquarters.” Those “what if” questions include:

• What if the representative is tremendously successful and commission payments spike beyond anything the principal expected to pay?
• What if the sales manager who gave me verbal promises not written into the agreement moves on to a new company?
• What if a venture capital firm buys the principal to quickly flip it?
• What if principal sells off all its assets, leaving only an empty shell with no resources to honor its commission obligations?

A representative-savvy attorney can craft agreement language that answers these “what if” questions so that years or decades later when the relationship eventually ends the representative and principal already know what that separation will look like.

The representative firm’s only chance to shape what that far-away separation will look like is usually before the agreement is signed. And when it comes to most of the signed agreements representatives have shared with me, that would be something completely different.