By Scott Flaherty Law360, New York (July 25, 2014, 8:07 PM ET) — In the face of age discrimination suits and calls from the American Bar Association to stop forcing older partners to retire, BigLaw has worked to find new roles for some aging partners that emphasize mentoring younger attorneys and big- picture business development while scaling back client work.
Law firms used to rely on strict mandatory retirement policies that required attorneys who reach a certain age to step down. But the ABA has long pushed for firms to move away from mandatory retirement, having adopted a stance to that effect in 2007, and a number of high-profile lawsuits and settlements put a stop to many such policies.
In 2007, Sidley Austin LLP settled for some $27.5 million age discrimination allegations brought against it by the U.S. Equal Employment Opportunity Commission, which challenged the firm’s retirement policies and alleged that 32 partners were forced out based on their age. Kelly Drye & Warren LLP in 2012 agreed to pay about $500,000 to resolve a similar EEOC suit, in which the agency alleged age bias on behalf of one attorney.
“A lot of these ageism laws — law firms aren’t immune to them, so they need to be extremely careful,” said Seth Horowitz, president of Horowitz Agency, an integrated marketing agency that specializes in the legal industry.
In the current landscape, industry experts explained that some, though not all, big firms have either abandoned mandatory retirement policies or added in a level of flexibility to them. Horowitz added that even firms with strict retirement policies will typically offer exemptions to attorneys who continue to bring in business worth a big dollar amount.
“Anyone who’s bringing in over a million is going to be immune to all of this,” he said. “They’ll always have a place to sit if they’re bringing in seven figures.”
Edward Shioyazono, a regional search director at the legal staffing firm Special Counsel, said those and other changes in the legal industry have allowed a talented crop of senior attorneys to remain in the workforce, although they have sometimes prompted moves to new firms or a reevaluation of an attorney’s book of business.
“This generation of partners has terrific experience and great credentials, and great reputations with BigLaw clients,” Shioyazono said.
But not all attorneys will continue to be as effective as they get older when it comes to bringing in business, which raises questions for firms that want to steer clear of the mandatory retirement route. On one hand, firms have an interest in maintaining the relationships their senior lawyers have developed — not to mention the experience those attorneys bring to the table — but, on the other hand, firms may also want to plan for a future in which those attorneys are no longer carrying the brunt of the workload for clients.
“It’s a very sensitive issue, because a lot of times you’re dealing with partners who have helped build the firm,” Horowitz said.
John Olmstead, president of the legal management consultancy Olmstead & Associates, struck a similar chord, saying in some instances, an older attorney may be hesitant to retire simply because so much of his or her life has been devoted to practicing law at a particular firm.
“In many cases, that’s the problem — the law and the law firm is their life,” said Olmstead.
Both Olmstead and Horowitz explained that, in lieu of mandatory retirement policies, there are ways that firms can broach with an older attorney the idea of a reduced workload while simultaneously affording that person a level of respect and flexibility to make a transition on his or her own terms.
As a first step, Olmstead said, it’s important for firms to have policies or training programs in place to put the idea of retirement or a scaled-back workload into attorneys’ minds at an early stage. He often recommends that firms have conversations about retirement with even younger attorneys, who may be in their 30s or 40s, as a way of “planting the seed … to begin planning for the future.”
“If you’re not talking about it or thinking about it,” Olmstead said, “you’re not dealing with it.”
Firms can, and often do, adopt other strategies as well, such as creating new roles for senior attorneys to fill — ones that may mean less of their time goes toward client work and more goes toward mentoring younger attorneys or developing the firm’s business in a bigger picture sense, experts said.
“You have to be creative with them, you have to re-create their role,” said Horowitz.
Another strategy, noted by both Horowitz and Olmstead, is implementing a “wind-down” policy, in which senior attorneys are given a level of flexibility and discretion in reducing their client work over a period of years, and transitioning it to a more junior partner of their choosing. That approach can send a signal to senior attorneys that, while their work is valued, they will likely need to hand it off at some point.
“You can reduce their compensation and still have them in a certain function without saying, ‘Hey, you have to leave the firm,’” said Horowitz.
Regardless of the approach a firm decides to take, Horowitz said it’s crucial for the firm to be thinking strategically about how best to respect its aging partners — and to be sensitive of what they can still contribute to the firm — while planning for the long-term when those attorneys may no longer be bringing in big business.
“Any firm that’s not planning, that’s not doing strategy around this, is really going to set themselves up for failure,” Horowitz said. “A firm that is doing it the right way, a firm that is sitting down and planning around this, is going to be extremely successful.”
–Editing by Jeremy Barker. All Content © 2003-2014, Portfolio Media, Inc.