"Danger, Will Robinson!"--Baby Boomers About To Retire En Masse
I mentioned in an earlier blog the huge opportunities and challenges facing law firms with the impending baby boomer exodus from the leadership ranks. I thought I would expand on that theme here.
That's right, you heard me--the long-standing complaint among senior associates and junior partners that they have no role in leading firms is going to radically change in the next few years. Take a look at the bios of the leaders in firms--that grey should be telling you something. That, coupled with several years of very healthy profits for equity partners (meaning less incentive to hang on and keep billing), and moreover combined with the heightened expectations of us all for long and fulfilling retirements, will all work together to create a single and compelling phenomenon: an impending tsunami of retirements that is going to rock the leadership of firms great and small. Click here if you don't believe me.
As the referenced article advises, most law firms are blissfully unaware of the potentially crippling effect of management ranks being felled through retirement. Those that can begin to plan ahead and really take stock of their intellectual capital (meaning of course their junior and mid-level partnership ranks) and begin to groom them for real leadership, will weather the storm. Those that won't will be scrambling to import high-ranking talent from other firms to bridge the gap.
The looming crisis could even be bad enough to force many more firms to adopt corporate-style leadership with true CEOs and all the rest (possibly even, gasp, non-attorney management!). It will be something to watch, believe me. It will also be a feeding frenzy in the recruiting world.
Mark my words, firms stuck in old-style, top-down management styles that don't account for the development and grooming of their talent are going to be in for a shock. Further, all these factors combined with the tendency even of current leadership to think only of their own careers with no regard for the future of firms, is going to mean huge opportunities for some--and yet further rounds of mergers. Also, even those firms that have been doing a good job at bringing up good talent are going to find even greater pressures in terms of retention--good leaders are GOING to be even more aggressively recruited.
The smart money is going to be on firms that combine solid retention strategies with agressive recruiting practices and close collaberation with professional headhunters.
Bright young partners be on notice: You may be far closer in line for the 'throne' than you think!
You heard it here first, folks!
Pete Smith, Esq.
BCG Attorney Search
Labels: career success in the law, law firm management, law firm partnership, legal careers, legal job search, legal marketing
posted by Peter L. Smith, Esq. at 10:53 AM
2 Comments:
You would think but with this article coming out. I don't necessarily see the boomer partners rushing to the door and turning down those 1 million dollar salaries and many will fight it.
Aging ABA to Debate Firms' Mandatory Retirement Policies
New York Lawyer
August 7, 2007
Reprints & Permissions
By Leigh Jones
The National Law Journal
Forty years ago, it was San Francisco's Summer of Love. This year, it's the Summer of Lawyers.
More than 9,000 attorneys, judges and other legal types will come together in the City by the Bay for the American Bar Association's 130th annual meeting from Aug. 9 to 14.
Besides hosting U.S. Supreme Court Justice Stephen G. Breyer as the keynote speaker, the organization also will take up issues ranging from law firms' mandatory retirement policies to state secrets privileges at its House of Delegates meeting.
The six-day event, which includes a legal-wares expo and dozens of hours of legal education, is the largest yearly gathering among the ABA's 413,000 members.
One of the initiatives ABA President Karen Mathis has pushed this year is the Second Season of Service, in which she has called upon lawyers to stay active in the profession by providing pro bono work once they retire.
By some estimates, a full quarter of the country's 1 million attorneys — or 250,000 — will be at least 65 by 2011.
"These are still vibrant people," she said.
The aging attorney population is also the focus of a proposed resolution that the House of Delegates is expected to vote on during its session on Aug. 13 to 14.
Proposal 10A calls for law firms to discontinue their mandatory-retirement policies and, instead, to evaluate senior partners individually in a manner "consistent with the firm's performance criteria."
Submitted with the proposal is a report on law firm mandatory-retirement policies issued in March by the Special Committee on Age Discrimination of the New York State Bar Association (NYSBA). The report considered such factors as the growth of the profession from 300,000 in 1960 to 1 million currently, the huge increase in the size of law firms, the lengthening of the lifespan and health of senior lawyers, and the elimination of age-based retirement policies in most other business sectors. The report then concluded that law firms should abandon mandatory retirement.
"It's out of step with the times," said Mark Alcott, immediate past president of the NYSBA.
The issue of mandatory retirement has received particular attention because of a lawsuit pending against Sidley Austin. Law firms are anticipating a decision from the U.S. district court in Chicago in an action filed by the Equal Employment Opportunity Commission on behalf of about 30 former partners against Sidley Austin over whether its alleged retirement policy violated age discrimination laws.
Milbank, Tweed, Hadley & McCloy Chairman Mel Immergut said his firm, which has a mandatory-retirement policy, considered the NYSBA report when it came out and decided that the policy at his firm was appropriate.
"However, we would certainly pay careful attention to any additional learning that comes from the ABA or any other responsible organization on this subject," Immergut said.
Mathis, who is a partner in the Denver office of Morristown, N.J.-based McElroy, Deutsch, Mulvaney & Carpenter, said that she liked to "listen to the debate," but that she favored abolishing the retirement policies.
"It's an arbitrary age limit that doesn't look at vitality, intelligence and the ability to perform a job," she said.
The House of Delegates is composed of 546 delegates, with representatives from each state. The U.S. attorney general and the director of the Administrative Office of U.S. Courts also hold seats. Its measures serve as the voice of the members, who make up the largest trade organization in the world.
Replacing Mathis, whose one-year term expires at this year's meeting, as ABA president is William Neukom, a partner at Kirkpatrick & Lockhart Preston Gates Ellis and former executive vice-president of law and corporate affairs at Microsoft Corp.
Dear Commenter,
You have a point, of course, and I did see the referenced article about partners putting up a fuss about mandatory retirements. However:
1) the article makes it plain: 25% of lawyers across the board will be of retirement age in the next 3 years--even with more sane (and legal?) partnership agreements, lots will opt out--even with 'normal' attrition (even normal in this "60 is the new 40" era, we are talking a significant crunch.
2) Remember, all the ballyhoo is not that every one of these people is going to split--but given the efficiencies in the legal market (as distinguished from the industry) mean that slight fluctuations make big waves--this is WAY more than a slight fluctuation--thus the phrase "tsunami".
3) Of course most Boomers aren't "rushing"--they are "ambling". But still, and to reiterate #2 above slightly, we are not going to see offices suddently vacant with 'gone fishin' signs hung over chairs--rather, we are going to see "merely" a margin increase in the number of retirements and non-equitization of partners into of counsel and emeritus status--that is enough to make the very slim pool of qualified talent all the more sexy. Compensation for law firm CEOs is going to really, really increase. I am sooooo looking forward to that . . . .
Thanks for the comment!!
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