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The heads of the heads of America's law firms are getting grayer by the day, as more and more firm leadership hits retirement age (and beyond). Nearly half of the partners in Am Law 200 firms are members of the Baby Boomer generation or older, according to a report by the American Lawyer. Boomers, the 76 million adults born during the post-WWII boom, are now anywhere between 52 and 70 years old -- prime retirement age. Sixteen percent of those partners are expected to retire within the next five years, Major, Lindsey & Africa estimates, and 38 percent will be out within 10.
What does that mean for Boomers who plan on continuing on, or the Gen X and Millennial lawyers who will be left behind?
Later Retirements, Shifting Clients, Pension Pitfalls
Lawyers are known for working late in life. In years past, many firms tried to counteract this trend by instituting mandatory retirement ages, usually at 65 or 70. In 2007, for example, a survey by Altman Weil found that 50 percent of firms with over 50 attorneys had mandatory retirement ages.
Now that more and more partners are hitting that mark, those restrictions are largely going by the wayside. Part of that is due to age discrimination lawsuits. But it's also inspired by the fear of high-earning partners getting pushed out of one firm on their 65th birthday and taking their book of business with them to a more age-inclusive competitor.
But when partners do retire, mandatorily or on their own terms, there may be difficulty keeping clients or transitioning them to new attorneys within the firm. Greater succession planning is needed, American Lawyer's Julie Triedman reports, to ensure a smooth client transition and to keep younger lawyers satisfied. At many firms, non-Boomer attorneys are feeling "increasingly restless," Altman Weil's Alan Olson says. "They perceive that seniors have a 'pull-up-the-drawbridge' mentality and are not invested in helping them in their careers."
And then there are the pensions. Some law firms don't fund their pensions separately, taking the payouts from their annual profits, according to another American Lawyer report that comes to us via the ABA Journal. Increasing lifespans mean that retired Boomer partners could be collecting from their firm pensions for decades.
Not All Bad News
Of course, Boomer retirement won't be exclusively sturm und drang. For attorneys who are moving on to the next chapter, retirement can mean pursuing some of their unexplored passions, whether it's raising horses in Wyoming, opening a vineyard in California, or just putzing around Florida.
For younger attorneys, the Boomer retirement could be an opportunity for advancement. Increased turnover at the top of firms could allow more lawyers to move into positions once dominated by Boomers, or to gain clients that had previously stuck with the same lawyer for decades. So, while the Boomer retirement will certainly be difficult to manage, other attorneys may still be able to benefit from the generation's loosening grip on the top legal positions.
Want more information on how generational differences effect the job market? Download Indeed's report "Three Generations of Talent: Who's Searching for Jobs Today" for free.
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