Skip to Content

Tough going

It's time for law firms to help partners plan for retirement.

Geometric-looking ceiling

In Vancouver, a longtime equity partner at the law firm Fasken Martineau DuMoulin LLP launched a legal challenge to his forced retirement at age 65. In Toronto, three veteran partners at Blake, Cassels & Graydon LLP left to join competing firms rather than face mandatory retirement.

These recent incidents are an indication that law firms need to find ways to accommodate aging partners who still want to work, say employment specialists.

“More and more, people in their late 50s early 60s are saying ‘I’m not sure I want to retire at 65,’ and what is really incumbent upon firms is to look at whether there are roles within law firms for those more senior folks,” says Paul Boniferro, a partner at McCarthy Tétrault in Toronto and national leader of practices and people.

“Firms today are trying to come up with innovative solutions for a number of reasons,” adds Ed Poll, a law-firm management consultant. “It’s one of the major issues because the bulk of the legal profession today is heavily weighted in the baby boomer side.”

The Supreme Court of Canada ruled in May, in the case of John Michael McCormick, that the partner of 30 years could not use British Columbia’s human rights code to challenge Fasken Martineau’s mandatory retirement policy as discrimination based on age. The court concluded that equity partners, who can vote and share in profits and losses, are not in the same vulnerable position as employees.

The decision effectively upheld the status quo, meaning equity partners can be forced to retire at age 65.

But that ruling aside, it makes business sense to find ways to accommodate older partners, assert Boniferro and Poll, rather than see decades of investment, prestige, specialized knowledge – not to mention client base – walk out the door, potentially to rival firms. That is what happened last January, when the three Blakes partners decamped.

“I think every firm can point to one or two examples of very senior people who have bumped up to the mandatory retirement age and it’s been imposed on them by the partnership and they end up at the competitor across the street,” says Boniferro.

“And having them across the street competing with you just doesn’t make sense.”

A clashing interest, however, is that law firms want and need to make room for younger partners, so that they are motivated to stay, and have opportunities to build their practices and regenerate equity in the firm.

Increasingly, law firms are making it a priority to sit down with lawyers in their early years and work out career plans that can include continued contributions to the law after traditional retirement age, whether it is staying as a lawyer, rather than a partner, or transitioning into another facet of the profession, such as teaching or becoming general counsel at a small business.

Boniferro says that post-partnership plans should begin as soon as lawyers are hired, and should be reviewed annually so that partners won’t feel targeted in their later years.

“What our firm is doing, and trying to keep a leading edge on, is to start developing a dialogue with partners very early on in their careers about developing an alternative career path, things outside of the law that people would like to do once their law practising is either completed or they are facing up against mandatory retirement,” Boniferro says. “You should have someone having dialogue with partners on a regular basis and we’re actually hoping to start this with associates as soon as they come in the door.”

Toronto lawyer Gillian Hnatiw, a partner and employment law specialist at Lerners LLP, suggests firms should avoid one-size-fits-all policies when dealing with retirement-age partners who do not want to leave. Rather, arrangements can be made on an ad-hoc basis, she suggests, ranging from extending tenure for a year or longer, or allowing partners to continue in a reduced role.

“It allows the firm to make room in the equity partnership for new blood, and it allows retiring lawyers or mature lawyers to stay in the game,” Hnatiw said.
“Perhaps they don’t want the risks and obligations that come with equity partnerships anymore and they’d like to negotiate a new deal, a new arrangement to work less, and everyone’s happy about that.”

Poll, who is based in California, contends that aged-out partners should be able to stay on as lawyers as long as they can earn their way with billable hours.

“What some law firms have done is say ‘we will not fire you, but at a certain age you must sell your interest in the partnership back to the partnership’,” says Poll, author of the 2013 book Life After Law: What Will You Do With The Next 6,000 Days?

Another alternative, he says, is to permit partners to stay, but only allow them to keep a certain number of their clients, with the remainders “transitioned over” to younger lawyers so the firm has a chance to regenerate.

Poll argues that it is “reasonable to unpartner,” because that arrangement is based on signed contracts between partners. However, it is “pure ageism” to force out former partners altogether when they are competent and in good health, and want to continue practising law.

Other lawyers, Poll says, would be happy to leave the profession, but they have not done any advance planning and their identity is so wrapped up in being a lawyer that it paralyzes them from contemplating alternatives.

Poll notes that demographics, as well as legal challenges in other countries, suggest that the issue of how to deal with ageing lawyers is not going away.

In 2010, 41 per cent of Ontario lawyers were age 50 and over, and eight per cent of those were older than 65, according to a Law Society of Upper Canada statistical snapshot. On the other end of the spectrum, only five per cent were younger than 30.

In the United States, the greying of the bar appears to be even more pronounced. According to the American Bar Foundation, the median age for a lawyer was 49 in 2005, compared to 39 in 1980. Also, 34 per cent of lawyers were aged 55 or over in 2005, compared to 25 per cent 25 years earlier.