Locking out older partners? The least-defended minority in the Square Mile
Given the level of debate generated by law firms' treatment of gays, ethnic minorities and women, a neutral observer wandering into the Square Mile might wonder why there is so little comment on the deal dished out to older lawyers. After all, many City firms have hardly any partners over 55, law firms are notoriously lax at implementing the employment laws they lecture clients about and the long-hours culture of commercial practice is hardly conducive to career longevity.
January 14, 2011 at 09:36 AM
5 minute read
Given the level of debate generated by law firms' treatment of gays, ethnic minorities and women, a neutral observer wandering into the Square Mile might wonder why there is so little comment on the deal dished out to older lawyers.
After all, many City firms have hardly any partners over 55, law firms are notoriously lax at implementing the employment laws they lecture clients about and the long-hours culture of commercial practice is hardly conducive to career longevity.
Yet it's hard to see how the status quo is sustainable. The forces pushing for reform are too many and too fundamental. Aging Western populations, longer life-spans, later retirements, tougher employment laws and changing attitudes to age – it's all pointing in one direction.
And fiscal pressures on governments in developed countries – further exasperated by the financial crisis – mean it's inevitable that at some stage age discrimination laws will have to be not only passed but aggressively enforced.
And, as reported yesterday in Legal Week, there are two more specific factors for law firms to chew over: government plans to press ahead with the abolition of the default retirement age of 65 in April and the court battle by Leslie Seldon to prove his former employer was guilty of age discrimination in requiring him to retire as a partner when he turned 65. (Seldon's former firm, Clarkson Wright & Jakes, won the case at the Court of Appeal but the ruling is considered difficult to follow – providing little practical guidance; the case is likely to reach the Supreme Court).
Of course, firms will still be able to have retirement ages but they're going to have to work harder to reasonably justify them and there will be pressure to have some provision to consider individual cases.
But how do all these factors fit into the brutal realities of life in City law? Partnership adviser Ronnie Fox says the employment policies of commercial firms have become a little more progressive in recent years – which isn't saying much – but he maintains that their current stance on older workers can't continue.
True, lawyers have historically been generally unwilling to challenge their employers legally and there have been few age-related claims since Freshfields Bruckhaus Deringer won a high-profile case related to its partnership restructuring in 2007.
But it's hard to argue with Fox's contention that the tough realities of modern partnership will make disgruntled lawyers more ready to pursue claims in future. Loyalty isn't what it used to be, certainly not after a string of law firm restructurings.
Obviously, lockstep and lockstep-derived models don't help. It's an irony that a system that pays people more on the basis of age creates huge pressure to get out in your early 50s. (Researching this blog, I heard the war story of a 52-year-old magic circle partner forced to bring his retirement forward a year because the younger partners were pushing for a clear-out of the old guard).
But I've never understood why lockstep is applied so slavishly. The model still has much to commend it but it was introduced in a different age. It's not an unchangeable fact of life – it's a construct ushered in 40-odd years ago to manage law firm expansion.
There's nothing to say the model can't – and shouldn't – adapt to make it easier to accommodate older partners at a point when a good number still have much to contribute but no longer want to commit to the same level of punishing hours. And obviously there's plenty of scope to use roles like special counsel.
To a certain extent, City practice is what it is and some areas like tax and antitrust will tend to provide a longer shelf life; M&A practitioners that want to go the distance have to mange the tricky reinvention from deal junkie to polished boardroom adviser. Areas like private equity and finance – where the hours are murder and the clients get younger every year – will remain less hospitable. But law firms should do better – both at finding ways to utilise their older staff and helping veteran partners prepare for careers outside law (admittedly, the latter's an Olympian task).
Many point to US law firms as having a much better record in using older talent. But that reputation is probably somewhat historic. The US legal market has been de-equitising partners – many of them older partners – for years, and one head of a top City firm argues that his Wall Street rivals are increasingly pressing older partners to retire.
Still, City firms could learn a few lessons from their American counterparts. Because one thing's for sure: they can't count on older workers going quietly forever.
- For more, see Leading law firms consider retirement policy shake-up
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