End of the road: Options for partners approaching retirement

Retirement for a law firm partner is becoming a moveable feast. Retirement dates vary across firms and, in some cases, no longer exist. Handling the closing years of a career as ?a partner and, critically, deciding when and how to move on can present a variety of challenges for all concerned. There are a host of uncertainties involved and, in many firms, not much by way of templates as to how to handle them – the only certainty is that an end will come at some point. When and at whose initiative it will come is the difficult bit.

Both parties are inclined to dance around the issue which, at its core, often has the thorny issue of money – from the partner’s point of view, how much is enough for his retirement pot and, from the firm’s, if the partner is being paid too much/more than is fair relative to the younger partners. Clearly, it is important to achieve a smooth ending with good grace on the part of all involved.

The question of when and how ?best to transition beyond the firm is in ?the minds of more partners than one might imagine – even the most successful partners can be distracted by this issue and, for those who may be feeling more vulnerable in these increasingly pressurised times, it can be a major ?and often troubling preoccupation.

The issues

The sorts of challenges which ?may be involved from the partner’s ?perspective include:

• sustaining engagement and motivation to the end;

• working out what to do next and how to secure future role(s);

• coping with competition from younger colleagues;

• deciding when his pension pot/savings are enough;

• planning and managing a good handover process; and

• assessing the point at which reduced hours and remuneration makes sense.

Partners can approach the watershed of retirement in a number of ways. Some may be going full steam ahead and be disinclined or just feel that they do not have the time to lift their heads from their day job. Others may be looking forward to it and have clear plans as to what their new life will look like – and could even be more interested in that than in keeping focused on their role in the firm. Some may see it coming but, for a variety of reasons, put the thought of planning to one side.

Many partners feel reluctant to initiate a discussion within the firm about their intentions regarding retirement for fear of being seen as lacking in commitment and being relegated to the slow lane. While many firms have become much more active in managing underperforming partners, they still often find it difficult to encourage honest and open conversations about retirement plans.

In many cases, a partner’s retirement from the firm is with a view to a further period of purposeful activity or even a full-blown second career, in which levels of remuneration and time commitment may be more flexible. Most partners will want to do something else when they leave their firm. What this constitutes and on what basis they want to do it will vary and often be very unclear. Working this out what and preparing for the next stage takes time and effort and is best undertaken before leaving.

Many partners lack experience in taking decisions about their own careers. Although they may be expert at advising others about their affairs and at driving forward transactions or cases on behalf of clients, the challenge of planning ?and implementing changes for their ?own future is often a task for which they feel ill equipped.

This rather disconcerting position for those who are used to displaying a sense of self assurance can result in an unwillingness to consider life beyond the firm. Anxiety about the unknown and possibly empty world that lies ahead may result in them clinging to the familiar world of clients and colleagues. Financial worries may not be at the top of their list of concerns, but there is often a sense of uncertainty as to whether there are any other roles for which they may be qualified or suited.

Retirement is no longer a binary single step; it is best seen and tackled as a gradual process.

 

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Tips on managing retirement discussions

For partners

• Take active charge of your own career

• Make time to think about the future and what you want it to look like

• Construct a plan, keeping the firm’s interests in mind

• Discuss your plan with management and demonstrate your value

• Create the time to network, gain relevant experience and build credibility

For firms

• Engage with your partners about what their plans are

• Offer help to facilitate thinking and planning

• Be flexible in response to sensible proposals

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Steps to take

The most effective transition to the sort ?of life beyond the firm which most partners seek requires several years of planning and preparation. This is very much harder to achieve after retirement, when the platform that the firm provides ?is no longer available.

Partners’ objectives in transitioning towards retirement are often:?

• some level of mental stimulation ?(“so that I don’t slow down too ?much too soon”);

• a sense of being of some use to others; and

• some flexibility in terms of time commitment (to allow for travel, ?family and other pastimes which ?have been sidelined over the years).

This process is best managed as a gradual sloping transition, rather than as a leap into the dark off the edge of a cliff.

The ‘foot to the floor’ mentality of most firms and the competitive markets of recent years can militate against partners finding the time to attend to themselves or their plans for the future. Once an upcoming retirement is made public – often only ?a few months before the effective date ?– there is not much time left to make plans or to build and explore the ?networks which are frequently the ?route to new opportunities.

Developing the skills and credibility that is necessary to succeed in a new context also requires time, effort and support. The trick therefore is to plan ?well in advance and to find the time ?and support in which to do so before ?it is too late. This is best achieved by ?adjusting the deal between the firm ?and the retiring partners in their last ?few years of partnership.

This is becoming an important strategic issue and some enlightened firms now offer their partners help with managing this aspect of their careers and have conversations about how partners can make a graceful transition to life beyond the firm. There is a demographic bulge of partners that is now reaching the more senior levels in many firms as a result of the significant growth in the number of partners made up in the 1980s and 1990s. This is therefore becoming a pressing problem in many firms.

The dialogue that must take place can take many forms and may be initiated by either party, but it needs to happen. It is most successful when the individual partner designs and then puts forward his own preferred plan to transition. Waiting for the ‘tap on the shoulder’ or risking being caught on the back foot is not ?a good option. Such plans can involve any number of components but, frequently, they include an adjustment ?of roles and responsibilities to focus ?more on those areas that the partner enjoys and provides clearly for succession planning.

It is important to keep a close eye ?on what the firm will perceive as being ?of value. At the appropriate stage, a ?well-managed client handover will be ?in everyone’s interests, along with some change in both the time commitment given to the firm and the financial arrangements. Firms with an existing post-plateau element to their lockstep ?or profit distribution arrangements are ?at a clear advantage here.

The case study boxes provide two examples of how this dialogue can take place effectively and how beneficial the results can be. In both cases, the individuals took the initiative and, with the help of a coach, were able to prepare and pitch their case to the firm’s management and move on to a new basis for the remaining years of their career at the firm. One is still working in his new role, which he describes as “like a new lease of life”; he has taken on a general management role within a part of the firm which will provide him with more credibility for what he hopes to do when he finally retires.

 

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Case study 1: Change in roles

A senior commercial partner in an international firm had returned from a spell in an overseas office and successfully resumed a fee earning and departmental management role in London. Having turned 50, he was finding it hard to maintain his motivation and was looking for a new challenge. He was considering a move to another firm, but preferred the idea of staying with his current firm for another five years or so before moving into a form of retirement which he hoped would include some continuing commercial or intellectual activity.

After reviewing his work styles and preferences, he developed a proposal which he then presented to his managing partner. This involved a greater focus on several key client relationships, in tandem with younger partners. He planned to devolve some other client relationships to fellow partners and to reduce his managerial responsibilities. This would allow him to spend more time acting as an ambassador for the firm within the industry group in which he was most experienced and in which it was likely his retirement activities might be found. The firm would also benefit from his taking on several formal mentoring roles internally.

The partner’s plan was put forward with a timescale and suggested financial adjustments over a period leading to a proposed retirement date. After some minor negotiations, this proposal was accepted and all concerned were able to move forward with the new arrangements. The partner was relieved and re-motivated, and the firm benefited from his new role and activities, the gradual transfer of his relationships and continued access to his knowledge and expertise.

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Case study 2: Second career

A successful partner with a host of senior industry and government contacts was beginning to think about life beyond the firm, but was struggling with the practicalities of how to plan for or make the transition. He could see one or two colleagues who he knew were seen to be ‘hanging on’ for longer than the younger partners wanted and was concerned not to be regarded in the same way or as an issue that needed to be addressed.

He went through a process of self evaluation and identified the aspects of his role that he most enjoyed. These then formed the basis of a plan for a differently-balanced portfolio of activities within the firm. This included consulting on all public sector pitches with which the firm was involved, as this was an area in which the partner had a very strong track record.

This proposal was put forward to the management, along with a nine-day fortnight and reduced profit draw plan. The tenth day would be used by the partner to research and network in the charitable fields into which he was interested in moving when he left the firm.

The partner’s proposed schedule was put together with a clear focus on what would be of value to the firm, as well as what the partner enjoyed most. It was accepted and he has since successfully taken on a role in a charity.

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A good ending

Succession planning is an important ?issue for firms and individual partners ?and pretending it does not exist is not the answer. Both parties owe it to the other to achieve a good ending, such that the retiring partner is actively and enjoyably engaged to the end and moves onto an interesting and fulfilling life beyond the firm. The firm will then have a valuable legacy and be able to encourage younger partners to continue to build the firm’s prosperity for the future.

Jonathan Macfarlane is a director at ?The Professional Career Partnership (www.thepcp.com) and was formerly ?a law firm partner