When Kelley Drye recently settled the age discrimination complaint that the EEOC had filed on behalf of a seventy-nine-year old former equity partner, the focus turned to whether law firms could adopt mandatory retirement policies. The conventional wisdom is that they’re a bad idea — maybe even unlawful age discrimination. The policy argument is that people live longer; those who are productive should be able to keep working; everyone should be compensated according to the value added.
The legal defense of mandatory retirement policies is that true partners are employers and, therefore, outside the law’s protections afforded employees. The rebuttal is that most partners in today’s big firms have little say over their fate, so should they get whatever benefits the law provides, including compensation based on their contributions.
As framed, the debate is incomplete.
Mandatory retirement is a misnomer. The issue isn’t whether partners can continue practicing law at their firms. Rather, the question is whether they should remain equity partners in a world where achieving that status is increasingly difficult. In other words, the dispute isn’t about any senior attorney’s devotion to the practice of law; it’s about the money he or she should get paid for doing it.
No one told Eugene D’Ablemont that he couldn’t continue working on his client matters. Indeed, he did for more than a decade after reaching Kelley Drye’s equity partner age limit of seventy. He simply wanted compensation appropriate for his economic contribution to the firm.
Salary as a “lifetime partner” (plus a bonus) wasn’t enough for him, even though Kelley Drye reportedly asserted in response to the original complaint that D’Ablemont billed only between 195 and 324 hours a year during the late 2000s. But he’d mustered letters from two clients who said that his personal involvement in their affairs over many years meant that his inability to take the lead on future matters “created a rather difficult situation” for the company.
Ay, there’s the rub.
The problematic dark side
Most big law firms have evolved — or devolved — into short-term bottom-line businesses. An eat-what-you-kill approach to compensation encourages partners to keep client relationships away from others who might claim billing credit when year-end reviews roll around. Likewise, the lateral hiring frenzy makes such behavior even more important to attorneys who want to preserve their options and demonstrate their dollar value.
As a result, aging partners have no reason to institutionalize clients by nurturing relationships with younger lawyers. For those who have little or no desire to confront either their own mortality or the prospect of life after their big firm careers, the incentives of most firms are unambiguous: keep what you have and try to keep anyone else from claiming any part of it.
Who benefits from this system? Equity partners who have already pulled up the ladder on the next generation by promoting fewer lawyers and making them wait longer.
Who suffers? Young attorneys who want opportunities and training. Apart from blockage and embedding economic interests in an aging group that is myopically self-interested, the system offers no reason for senior lawyers to become mentors.
What is collateral damage? The firms themselves. The failure of elders to encourage their clients to trust the firm’s next generation produces long-term institutional instability.
At the heart of the problem is a short-term metrics-driven model that fails to guide aging partners to productive lives after the law. Aric Press suggests ways that firms could do better. Meanwhile, the absence of mandatory retirement rules for equity partners will make existing intergenerational tensions worse as they undermine the fabric of many firms.
Again, no one is saying that such elders can’t continue practicing for as long as they want. But that doesn’t require hanging on to a slice of the equity pie.
As for clients who worry about a “difficult situation” that might result if their long-time counselor will no longer be lead attorney into his or her eighties, consider this: eventually, everyone dies. There’s nothing that even the EEOC can do about that.
Steve, I actually strongly disagree. The problem with mandatory de-equitizing partners at a certain age — which plenty of firms do — is that the lawyer suffers an undoubted loss of stature and power as a result. It frankly seems a bit patronizing to say that a partner still “gets” to work and therefore there’s no real problem. The notion that at some arbitrary age an equity partner should simply step aside for the good of the firm begs the question of what the firm is. So many of your other pieces lament the loss of collegiality that one would hope for from a strong and supportive partnership. Cutting out the older partners seems just as problematic as using and discarding younger lawyers, and the thesis of this piece would suggest that the only thing younger lawyers should be aspiring to is getting a piece of that older partner’s business. My guess is that if you got rid of mandatory return of shares and instead rewarded less-productive partners (who nonetheless have client relationships) for sharing the work with younger lawyers, you’d have a pretty good, mutually beneficial system.
Maybe. But is a seventy-something equity partner who bills 300 hours a year — and who hoards client relationships to preserve his equity position — helping collegiality? Short of mandatory retirement from the equity partnership, what will encourage aging partners to transition clients to the next generation. As partners age, they should lose power. They lose “stature” only if everyone in the firm — including them — has their personal identities and self-images tied into their equity partner positions at the firm. The prevailing eat-what-you-kill-and-try-to-keep-it-forever culture exacerbates that problem. At least, that’s the way it looks to me. In any event, thanks for the message.
This particular partner’s situation may not be commendable, but we don’t know what he was doing in terms of feeding work to younger lawyers — and there certainly is a larger point to be seen here, which is that firms do regularly demote partners based on age alone. And if the only currency at a firm is money and shares, of course losing shares will mean a consequent loss of stature.
Every firm partnership talks about this. The talk is usually that they need to start giving the senior partners a financial incentive to transition the client relationships and work. When that actually happens, I will fall out of my chair.