Preparing for the 'second season'

Published on: 
02/04/2008
Published on 2/4/08

According to a recent study by legal management consultant Altman Weil, the closer to retirement a lawyer gets, the more likely he is to oppose mandatory retirement ages.

Interviews with a number of aging lawyers suggest that they don't want to retire, but they do want to work part time only, and they no longer (if they ever did) want to be responsible for rainmaking.

In a recent case involving a firm subsequently merged into Thelen Reid, the law firm argued that the lawyer breached his employment agreement by failing to produce sufficient billable hours. The lawyer argued that he merely had to be available to do work and that he did not have rainmaking responsibilities.

The arbitrator found that the lawyer did seek billable work and was available. The employment contract did not otherwise require that he reach the firm's billables' benchmark.

In another case, involving Sidley Austin, the Chicago-based law firm, the EEOC claimed that the firm fired a group of lawyers on the basis of age. The firm alleged that the "de-equitization" of partners was based on decreased productivity.

The parties settled and the law firm reportedly paid more than $27 million dollars to the approximately 40 dismissed lawyers.

The EEOC alleged that Sidley acted like an employer, that the lawyers in the firm were partners in name only, that they were treated and acted as employees without any real involvement in the management of the law firm, and that their "dismissal" was subjective.

The inability to point to benchmarks required by all lawyers of the firm, such as hours billed, origination billings and firm governance participation, coupled with common characteristics of the dismissed group that are contrary to law (such as all the dismissed lawyers being over the age of 40), can give rise to claims of wrongful termination.

Despite the increasing frequency of such claims, and the increasing victories on the part of the lawyers making the claims, most firms are not addressing this issue with urgency. In fact, the firms I've discussed this with insist that their mandatory retirement age will not change, and they still intend to de-equitize partners who reach a given age, usually between 62 and 70.

A new managing partner of one firm told me that he sees partner succession as his biggest challenge. He needs to find ways to encourage retiring partners to leave gracefully, transitioning their client relationships to other lawyers in the firm, thereby enabling the firm to retain the business as the retiring lawyer steps back.

Perhaps the modern law firm will create an alumni club of retired partners similar to the formal alumni of associates created by some larger firms. Some law firms are finding these groups are good networking and referral sources for future business.

With the aging of our population, new standards will emerge. Hopefully they will help lawyers transition smoothly into their "second season."

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