Published on 6/29/09
The global financial crisis has created fear and confusion for countless lawyers who, like many others, suddenly have seen nest eggs shrink dramatically and fear they may outlive them if they do not continue working.
The only way many lawyers see that they will be able to retire is to reduce significantly the retirement expectations and standards of living that they anticipated not long ago. While layoffs at big firms get the headlines, the real pain, as we've written before, is in small firms and solo practices.
However, there is a flip side to this situation - senior lawyers in small firms may be much better positioned for retirement than their counterparts in large firms because they have something of value to sell: their practices!
For years I have been amazed at the number of lawyers who still believe that their practices have little or nothing of value to sell, irrespective of the size or profitability of the firm. Every firm, however, represents an investment of years of hard work and financial resources in growing the practice and building goodwill.
A vibrant client base and a strong professional reputation are real and tangible assets that can bring a higher selling price for a firm when the lawyer is ready to sell. Some practices are so small and personal in nature that the purchaser might not succeed in keeping the clients. This, however, is a rarity.
Even the smallest and most personal practices might be saleable for the right price and under the right terms. Buyers are law firms that are well run and free of debt and that may themselves be run by senior practitioners; they are now positioned to take advantage of many opportunities to be offered by purchasing other practices. It's a win-win situation for both parties.
Contrast this with the situation of the "de-equitized" senior partner in a large law firm. De-equitized lawyers have likely earned good money during their time with the firm, but did they save enough to be independent or did their standard of living increase over the years to match their income? Will their egos be able to handle gracefully the psychological impact of being told, "You're not wanted here?" Will they be able to get any equity at all out of their firms, and if so, how fair will be the price set by their former partners who are casting them away?
No wonder lawyers between the ages of 48 and 65 have suicide rates among the highest of any profession and some six times higher than the general public.
Of course, not every older sole practitioner is perfectly positioned to sell a profitable practice, and not every big-firm senior partner is facing an abrupt and painful end to a career. But the fact remains that the sole practitioner has definitely built something of value and can be in the position to enjoy the fruits of those labors.
The big-firm partner may have no alternative but to sue the firm, alleging that they were merely "employees" who were thus covered by age discrimination laws. They may be right, but that is hardly an ideal end to a professional career.
