Partner retirement can be a thorny issue to discuss at the best of times. With its connotations of old age and finality, it\u2019s not a topic that partners and firms are eager to bring up, especially in a sector with as much career pride as law.<\/p>\n\n\n\n
But by not taking the time to properly plan for retirement and partner succession, firms risk seeing an unpleasant end to what had previously been a long, valuable and positive relationship.<\/p>\n\n\n\n
It\u2019s a situation well known to Ingrid Van Berkel, a former co-managing partner at Everseds-Sutherland\u2019s Dutch offices, now a TPC Leadership executive coach and facilitator, and to TPCL managing partner Annelieke Jense. We sat down with them to get their perspective on why law firms need to prioritise their retirement planning.<\/p>\n\n\n\n
Retirement doesn\u2019t have to be a taboo<\/strong><\/p>\n\n\n\n One of the biggest hurdles in planning for retirement and succession can be just discussing it in the first place. \u201cIt\u2019s a taboo topic to talk about,\u201d Ingrid says. \u201cDepending on the firm there might be provisions for a mandatory retirement age, but in all the years before then there is often no conversation at all.\u201d<\/p>\n\n\n\n It\u2019s easy to see why retirement can be an uncomfortable discussion. Lawyers often live for their work, and no young partner wants to be reminded of that future day when they\u2019ll have to stop practicing. And with firms that have a mandatory retirement age, partners can often feel like they\u2019re being shown out before they\u2019re ready to stop.<\/p>\n\n\n\n \u201cHow different could it be if retirement was something to celebrate?\u201d says Annelieke. \u201cAs the start of something new, an acknowledgement of a successful career and a chance to be thanked for contributions to the firm. But something needs to happen to accomplish this – foremost to normalise the conversations around it long before the actual key life event.\u201d<\/p>\n\n\n\n Some measures for solving the above are actually very simple. TPC Leadership led a round table with managing partners from a number of international law firms, and one of the points that came up was the importance of relating to your partners and getting to know them better.<\/p>\n\n\n\n \u201cWhat are their hopes and interests? What are their plans for the future? What really matters to them?\u201d says Annelieke.<\/p>\n\n\n\n \u201cBecause if you know this, you can draft an exit together that fits the person and might include a win-win situation and – we would argue- will happen in a totally different tone, mindset and atmosphere. \u201d<\/p>\n\n\n\n Succession means safeguarding the firm<\/strong><\/p>\n\n\n\n When those conversations don\u2019t happen, and the path to retirement is not institutionalised nor normalised, retirement can become a sudden and painful process. Lawyers are hard-working and devoted to their practice but the flipside is that they don\u2019t have a lot of time to spend self-reflecting on their next steps. So when retirement comes at the end of a long career, it can feel like a bolt out of the blue.<\/p>\n\n\n\n Not only is that distressing for the retiring partner, it\u2019s usually damaging for the firm as well. Exits are often painful rather than amicable. And when partners leave on those terms, that\u2019s when it becomes a competitive process and some lawyers will look to take their clients with them.<\/p>\n\n\n\n \u201cPoor succession planning drives the tendency to be really protective,\u201d Annelieke says. \u201cThey think, \u2018My clients, my dossier,\u2019 and that\u2019s a financial risk for the company. You want people to leave happily, keeping important clients in the firm.\u201d<\/p>\n\n\n\n Succession isn\u2019t just about keeping hold of clients, though. It\u2019s about making sure the firm and the team that stays behind is in good shape for the future. Retiring partners have a key role to play in that. They\u2019ve spent their life practicing the law and their expertise is the perfect springboard for creating new, young partners.<\/p>\n\n\n\n \u201cEvery partner who retires should take care of their own succession and their legacy,\u201d Ingrid says. \u201cWhether they\u2019re retiring because of age or another reason, they should be working with their team and the firm for a couple of years before that to make it a smooth process.\u201d<\/p>\n\n\n\n And that work can continue even after they\u2019ve left. There are few greater ambassadors for your firm than esteemed former partners. Taking the time to make sure their retirement is peaceful and pain-free can set you up with an alumni network that speaks highly of your firm, both to potential clients and lawyers who want to join you.<\/p>\n\n\n\n It\u2019s not just business, it\u2019s the right thing to do<\/strong><\/p>\n\n\n\n There are plenty of financial and business benefits to properly planning for succession. But while those hard numbers mean a lot in the legal profession, it\u2019s just as important to remember that retirement is a human issue before it\u2019s a business one.<\/p>\n\n\n\n After all, a partner has devoted the best part of their life to building up and co-managing their firm. It\u2019s only right that their contribution should be valued and their commitment paid back with a smooth retirement.<\/p>\n\n\n\n \u201cWhy do we need a business rationale?\u201d asks Annelieke. \u201cWe\u2019re talking about human beings who have invested all of their energy, knowledge and personal sacrifices into your firm. Isn\u2019t it the decent thing to make sure they leave happily and appreciated?\u201d<\/p>\n\n\n\n It would be fair to say that this also applies to the other way around too. The firm has provided the opportunity and surroundings to have a fantastic career with intellectuel, identity and financial benefits. Would it not be favorable to ensure one\u2019s leaving ensures the maximum handover for the future success of what you have helped to build up?<\/p>\n\n\n\n