Silver steps to a golden future…
by David J Bilinsky
Nothings gonna touch you
in these golden years,…
Words and music by David Bowie.
Retirement. That one word conjures up a host of thoughts of a golden time filled with leisure activities, good health and open vistas. Unfortunately, with the aging of the baby boomers, the thought of retirement of large number of lawyers creates headaches for law firms both in terms of trying to replace the retiring lawyers as well as trying to fund all their retirement expectations. For solos, particularly those in the interior, they are facing the difficulty of trying to attract someone – anyone – into their practice to fill their succession needs. And all lawyers need to turn their minds to the question of illness or disability while still in practice and how the needs of their clients, and the financial needs of their family, would be met in such a situation.
The reality is that most lawyers do not wish to suddenly retire; a more reasonable expectation is lawyers continuing to work with a lower time, and financial, expectation. However, law firms have not typically dealt with a large number of lawyers who are slowly transitioning out of practice. The whole process of transitioning lawyers to something less than full-time practice raises its own host of issues. For one, most law firm financial models are based on full-time lawyers occupying the leased space and using the full-time staff accordingly. How do you adjust both the firm billing model as well as the firm financial equation if you have lawyers in offices that are still priced at full overhead rates but are occupied by lawyers who are billing out at less, and in some cases substantially less, than full-time expectations? Younger partners, who have their own expectations as to work and income levels, are not particularly predisposed to payments or subsidies to non-full-time partners if they are not pulling in full-time revenue. Retiring partners may also have unrealistic expectations as to the value of their practice, particularly when it comes to their “capital account” and how it is to be paid out to them.
Furthermore, the whole spectacle of retiring from the practice of law can raise problems of anxiety, depression and loss of self-esteem.
Aside from the whole issue of planning from a financial perspective for your retirement (of which there are many resources on the Web and in print) there are all the law firm management issues in and around succession and retirement. Let us look at some of the suggestions that have been put forward in this regard:
Nothing happens unless there is first a plan. Accordingly, a good place to start is for the lawyer or lawyers in the firm to envision a timeline and an expectation of what they need and want in terms of their retirement. In many cases, this will mean developing a policy around part-time practice and transfer of files. Engaging all the lawyers of the firm into this dialogue will ensure that at least all points of view are aired and discussed. There is no doubt that the compensation formula must be adjusted to take into account the lower hour and revenue desires of the transitioning partner. Provided that a proper allocation of overhead based on full-time and part-time partners can be reached, all parties could be satisfied with the adjusted billable time and revenue targets and adjusted draws.
As full-time lawyers moved towards part-time practice, other staff must have the capacity to take up the slack. Younger lawyers stand to benefit here from both the mentorship as well as the exposure to higher value added work. Accordingly, a firm needs to put into place a plan to attract, retain, and groom younger lawyers to gradually take over the legal work.
In larger firms, the move to client teams aids in the issue of transitioning clients and files towards younger lawyers. In smaller firms, the issue may be more acute, particularly if there is a perceived loss of income arising from the transitioning over of a client. It is suggested that the firm consider some adjustment incorporating client origination or some other factor to compensate the retiring partner during the period of transition.
LET GO OF THE STEREOTYPES
To assist everyone in the “downshift” phase, it is important to keep the options open and not to cling to outmoded and inflexible plans and expectations. Dialogue and involving people within the process, can go a long way towards eliminating the speed bumps along the road to your goal.
PLAN FOR THE WORST
It goes without saying that the best laid plans can be upset by sudden illness or accident. Every lawyer should have arrangements in place in the event of a sudden illness or accident for another lawyer to have the legal authority to take over their practice, protect the rights of the clients, and make such arrangements as are necessary in the circumstances. This includes incorporating wording into your will to allow a lawyer to deal with your law practice.
With proper planning, vision, and implementation, a lawyer and law firm can look forward toward a reduction and eventual retirement of those active in the practice of law. The most important part of this puzzle is to start working on it – now – while you still have the time and luxury to explore different options. Every journey begins with a single step; proper planning will ensure that those steps take you to a place where nothing is going to touch you in those golden years.
David J. Bilinsky is the Practice Management Advisor at the Law Society of British Columbia. E-mail: email@example.com. Blog: www.thoughtfullaw.com. The views expressed herein are strictly those of the author and may not be shared by the author’s employer, the Law Society of British Columbia.
Dave's Tech Tip
Technology Tip from Dave’s Award-Winning Blog: (www.thoughtfullaw.com)
My latest favourite Web Site: www.TripIt.com
All of us take a trip sooner or later. Organizing all the details can be a pain. Welcome to TripIt. TripIt works as follows:
You register with TripIt (supplying the usual information) and establish an e-mail address and password. From there, you make your plane, hotel, car etc. reservations – and e-mail a copy of your confirmations to firstname.lastname@example.org. Here is where the magic starts.
TripIt starts a new itinerary for you – and as you add in your hotel to your plane reservations, car etc…. it automatically builds your trip itinerary for you. This is truly magic – you do *not* have to rekey in anything – TripIt scrapes or discerns your travel plans automatically – and adds in links to “online checkin,” “check flight status,” “get seating advice” as well as necessary info such as departure and arrival information.
Hotel information is similarly organized... and includes a summary of the hotel room’s details (such as free internet). It also includes check out times, maps and directions from the airport to the hotel, weather information and such. You can invite in collaborators, add notes to the trip, and much more. This is one cool travel site and one that will have me coming back time after time. Hat tip to Tom Mighell and his blog Inter Alia, who also is the Chair of ABA TECHSHOW this year, for putting me onto this site!
This article originally appeared in the February 2008 issue of BarTalk and is reproduced here with permission of both the author and the Canadian Bar Association, British Columbia Branch.