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H*ll No, I Won't Go! Exploring The Complexities of the Retirement Decision

Posted By Sara E. Rust-Martin, Sunday, August 27, 2017
Updated: Friday, August 25, 2017

H*LL No, I Won't Go!

by Ellen Freedman

March/April 2017

The problem of lawyers who won't quit isn't a new one. In fact, it's one of the first I encountered when I entered the legal industry. What is new is the that this problem's consequences are more difficult to deal with in today's marketplace.

My first law firm had three of its prime offices reserved for attorneys who rarely made appearances. The offices sat mostly dark, cluttered with old files and papers reminiscent of a busy practice and plenty of personal momentos accumulated over a noteworthy career. The supporting staff had long since been reassigned or retired. When year-end profits were distributed, checks were cut to these attorneys whose names I recognized from letterhead, but whom I had never or rarely met.

I started my management career in the corporate environment. I had never encountered this situation there and it made no sense to me. People who didn’t work weren’t still collecting paychecks. They didn’t have offices. They didn’t get a piece of the profits.

Back then, when an attorney became a law-firm owner, there was an expectation that it was a bestowment for life, ending only upon the voluntary withdrawal of the owner or the owner’s death or permanent disability. It was rare for someone to withdraw voluntarily.

Let’s face it: Lawyers are about being lawyers. For most, their entire identities are based first and foremost on being lawyers. That’s why, even with the best of intentions to step aside at some certain age, lawyers find themselves emotionally unable to pull the trigger when the time arrives. Because, upon retirement, there is no longer an answer to the existential question of “Who am I?”

Hobbies cannot fill the void. Many lawyers think that their hobbies will see them through. But if the hobbies are just pleasurable time-fillers, it becomes apparent that they’re just not enough. Plus, some hobbies are predicated on certain levels of continued health, and one may not be able to participate fully or at all when retirement arrives.

Activity that provides both meaning and purpose is required to create a satisfactory alternative to one’s former career — not just activity to fill the day and pass the time, but activity that provides a new sense of identity in doing something that is both of significance in the universe and that imparts a sense of personal satisfac- tion. For some, there must be a monetary reward to achieve satisfaction. For others, there must be a distinct lack of reward other than knowing one is giving back and doing important work. The bottom line is that it has to be activity that one can feel passionate about and take pride in, and one that creates a sense of worth and accomplishment.

It’s not surprising that for the majority of lawyers, planning for this “next step” is not something that takes priority in their busy lives. Only a rare few have a calling that they look forward to answering in some next phase of their life. Yes, some aspire to write, teach, volunteer, create a foundation, become entrepreneurs or travel the far reaches of the world. They’re the lucky few. For most, a lot of questioning and soul searching is required in order to identify the next step, let alone lay the groundwork to make the transition possible. And as a result, although there may be an occasional creative thought, it disappears quickly, like the morning mist under the glare of sunlight.

For a time, growing firms began proactively protecting themselves by incorporating such safeguards as mandatory retirement or de-equitization ages. Partnership agreements were amended to spell out clearly any options for continued employment at the firm past a certain age, as well as for voluntary withdrawal. These changes ensured that there was continued room at the top for younger lawyers to move up in status and earnings. They ensured that the next generation would have a reason to stay, thus ensuring the succession and perpetuation of the firm.

While these changes worked overall to deal with the challenge of lawyers who refused to retire despite being long past their prime, they sometimes became cases of throwing out the baby with the bathwater.

Advancements in medicine and nutrition mean that a lot of lawyers are still capable of making positive contributions much later in life than anticipated when these agreements were amended. Seventy-five has become the new 65. Not for all law- yers, certainly, but for many. Some would say for most. We are seeing now that a lot of lawyers with many more good years to contribute are being forced out of their firms too soon. Many struggle to re-position themselves elsewhere, where they can continue to practice and contribute.

While the implementation of mandatory retirement ages has been successful in creating room for succession, it has done nothing to assist departing lawyers with finding their new purpose. It has created a lot of angst for many. It has cast too many adrift.

I’m not a big fan of mandatory retirement. That’s because I’m the one who often gets the calls from the aged attorneys who are stunned by how lost they are. Yes, their fate was not a secret. Yes, there was plenty of advance notice. But when the time arrives, they find that the hobbies and small opportunities within the industry, which they thought would sustain them, are simply not enough. There is not sufficient purpose and meaning. All of a sudden their identity and self-worth collapse in an unsatisfying mess.Another less-common reason for refusal to retire is one of economics. Notice I didn’t use the word “simple” when referring to economics, because there’s nothing simple about it. For some, their significant retirement savings vanished during lengthy recessions. The flip side to living longer and maintaining vitality longer is that one’s desire to maintain an active lifestyle extends one’s need to earn a living, as well as to build a sufficient retirement nest egg. As my 93- year-old mother frequently says, “I have learned how to continue on while outliving all my friends and siblings. I will never learn how to outlive my savings.”

With increasing frequency, lawyers share with me that they cannot afford to retire due to personal financial circumstances. In some instances, one or more ex-spouses may have claimed a share of retirement savings in property settlements. In addition, we have seen an increase in what I lovingly call “do-overs.” Formation of new family units later in life creates a need for significant financial means to pay for second rounds of college, grad school, weddings, and so forth at a later age than previously experienced.

Within law firms there is now a dichotomy between what may be good business practice for the firm itself and what may be desirable or necessary for individual members. Because of the inherent conflict of interest for so many owners, firms often lack the ability to make necessary changes in the absence of a clear consensus.

Let’s look at a midsize urban firm that never anticipated these issues or modified its member agreement. An octogenarian partner is still occupying an office and making use of a part-time staff member. He is a current member of the bar, but his role is exclusively social.

On an objective basis, he has not produced revenue for the firm in many years. He continues to earn a disproportionate share of firm profits. No doubt he feels that this is his right for all of the sweat equity he invested in building the firm. In reality, he has probably long since been repaid in full.

The firm’s only mechanism to change this situation is to call for a vote to eject him. It will require a unanimous vote of all but the partner in question. Let’s be completely candid. If you were called upon to cast a vote, how good would you be at distancing your emotions from what was good for the firm? I suspect that you would be having a conversation with yourself: “What if I am next? What does this say about our gratitude and loyalty? If it were me, I would feel horribly betrayed and humiliated!” The more collegial the firm, the more difficult it will be for each owner to cast his or her vote dispassionately in favor of the health and viability of the firm.

So while the economic reality and well- being of the firm call for one decision, the likelihood is that just calling the vote will be a damaging and destructive — probably divisive — exercise for the firm. The managing partner in this firm, to his credit, did not call for a vote. But when he turned to me for other suggestions, my only one was that he try to cut a deal with the elder partner to retire voluntarily.

Deep down, I know that it is not a question of money that keeps the partner at the firm. Emotionally, he is just not capable of letting go of his identity. Unless the firm can replace his current role with one that provides sufficient purpose and meaning, no negotiation will be successful.

Yet another manifestation of the same problem presented itself to me recently. A retired attorney who was more than 90 years old sought my advice on starting a solo practice. His reasons were not related to any financial need. I spent a good deal of time exploring what was motivating this attorney to want to start a practice from scratch at his age. It took a while for him to get to his real motivation: He needed to do something that would earn him a greater amount of respect from his children upon his passing. Retiring from a long- standing career with reasonable economic comfort wasn’t enough. He needed to be engaged actively in what he considered important work. He needed to rebuild his identity. His biggest concern was that he achieve this goal without losing any of his nest egg. So we dealt with the economics, given his desire to work limited hours, that would allow him to achieve his goal.

I remember when firms reluctantly came to the realization that they were not responsible to look after the post-retirement financial well-being of their members.

That’s when firms starting putting in retirement savings plans, purchasing buy-sell insurance policies and making members aware that they were responsible for their own financial well-being upon retirement.

That’s all well and good but, in my opinion, the most important component in this process has been and is still being ignored. Who will help these aging attorneys build a vision for the next stage of their life?

How will they identify what will create sufficient meaning, purpose and passion to help them maintain a strong, albeit changed, identity?

My observation is that this kind of examination isn’t on the radar screen of most attorneys. Nor is law-firm management thinking about assisting attorneys in this area. I regret that I am so often in the position of informing law firms and individual lawyers that there is yet one more difficult task that they must undertake.

So what should be done? I don’t claim to have all of the answers. I hope that bar association senior lawyers sections give this some thought. Initial thoughts I have involve seeking counsel from life coaches or psychologists. It’s never too late or early to begin to address this eventual challenge. Spend quiet time alone and with family, friends and colleagues, trying to uncover where your passions lie. I’m convinced that there has to be passion on your part about whatever the next step involves.

At the firm level, management can encourage proactive thought and provide forums for discussion. Perhaps they can bring in a speaker or two who can talk about transitions and discovering how to navigate one’s individual path to a next phase that is meaningful and rewarding. Perhaps develop a recommended-reading list.

Every firm should think about what alternatives it can offer for attorneys approaching retirement and openly discuss the possibilities. If a lawyer is interested in developing a new path, then hammer out the details to make it a viable alternative. All or nothing should not be the only possibilities for a senior lawyer’s career.

I encourage bar members and firms wrestling with these issues to begin these discussions. As so many of us enjoy longer lives, let’s work to maximize our enjoyment and sense of satisfaction to the very end.

Tags:  Retirement 

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ABA Retirement Funds: An Opportunity to Learn More About Retirement Funds

Posted By Sara E. Rust-Martin, Wednesday, June 14, 2017
Updated: Tuesday, June 13, 2017


The ABA Retirement Funds Program is hosting a free webinar on June 29th at NOON CST: UNDERSTANDING CASH BALANCE PLANS.

If possible, please plan to attend and learn more about the ABA Retirement Funds Program.  

Registration is free and easy! To register, just follow the link below. You do need to register for the webinar in order to attend.

What Members Will Learn?

  • Insights into the retirement savings landscape
  • The basics of retirement income and where it comes from – social security, individual savings and employer sponsored programs
  • Plan type savings and accumulation comparisons
  • What is a cash balance plan and what providers are needed

Tags:  ABA  Retirement 

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Practice Pointer: Thoughts on Succession Planning

Posted By Sara E. Rust-Martin, Monday, June 5, 2017



 Thoughts on Succession Planning[1]


How is your firm planning to deal with its future?


For many firms, coming to terms with aging and retirement, and identifying transition candidates, can be a difficult process. But, this is essential for all firms, small and large, because the failure to plan and develop a timeline for transitioning can have major repercussions including losing clients, losing talented associates or potential leadership, instability within the firm, among others.


Because most firms do not have a succession plan in place, here are a few tips and considerations:


1.      A succession strategy and plan should be incorporated into every strategic plan and partnership, operating or shareholder agreement. It is never too early to start thinking about succession planning.

2.      If any sole-owner firm, or when any partner in a multi-owner firm, is age 50 or older, it is important that the firm get started on developing a succession plan.

3.      Remember, the succession plan and transition will take time. Solo practitioners will have a significant challenge because there is no obvious person to whom the practice will transition. Thus, the practitioner may need to hire and groom an associate who could buy the firm or become a partner and eventually buy the partner’s interest.

4.      A succession plan should start no less than five years from the retirement or exit date of the owner/partner. For some, less time is sufficient. Think through your circumstances, talk with your partners, develop a plan that works for you and your situation, and then take action.

5.      “Write down the plan and timeline because what is written down, what is measured, what is calendared, is what gets done. Effective management of the succession planning process takes discipline and accountability. Once it is written down it is in the form of a “project plan” with due dates, start dates, tasks and action items, required resources and names of those responsible for different tasks and action items. Unless attorneys approach their retirement like a case or project and develop a succession/transition/exit plan with calendared timelines, the project will likely experience fits and starts, timeline drift and the needed momentum may not materialize”.[2]

[1] Olmstead, J. Are You Prepared for Your Exit? Your ABA Newsletter. Apr. 2017.

[2] Id.

Tags:  Law Practice Management  retirement  succession planning 

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