Mandatory retirement is back on management’s agenda

October 14th, 2010 by Jim Cotterman

Retirement, succession and transition are getting more attention in law firms again. And mandatory retirement provisions are one of the central topics at many firms.  Hopefully this is a good sign that firms feel reasonably confident about their economics to turn to other important issues.

Our last research on these issues were a 2007 flash survey and the 2008 Retirement and Withdrawal Survey (which is now owned by ALM Legal Intelligence).  The 2007 flash survey indicated that while 50% of participants had mandatory retirement provisions, only 38% agreed with enforcing those provisions.  The 2008 survey looked at, among many retirement topics, succession readiness.  Interestingly nearly half of those firms indicated that they had not done any succession planning and did not consider it an issue.
We believe that the profession will move away from mandatory retirement.  Three factors support this conclusion.
1.  Profession expectations:  The 2007 New York State Bar Association (April) and American Bar Association (August) statements strongly urged its members to abandon mandatory retirement.
2.  Regulatory enforcement:  The October 2007 US EEOC consent decree with Sidley Austin on an age discrimination claim the EEOC filed on behalf of 32 former partners establishes the EEOC’s interest and willingness to apply employment law provisions to partners in law firms.
3.  Competitive pressures:  Partners approaching mandatory retirement age, who wish to continue their practice and have a sufficient client following, are going to seek those firms where they are welcomed.  Admittedly this will require more robust partner evaluations to ensure that partners meet reasonable professional and performance expectations.  But those challenges can be met.
The profession will need to carefully consider its senior partners in terms of their best roles in the firm, community and clients.  Some of the value these practitioners contribute will require changes in what is compensated and how to seamlessly integrate this into the expectations of younger partners and firm culture.

This entry was posted on Thursday, October 14th, 2010 at 9:17 am and is filed under Economics, Retirement, Partner compensation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply

Fatal error: Call to undefined function show_subscription_checkbox() in /nfs/c02/h11/mnt/24906/domains/ on line 101