Annual Meeting 2007

ABA: End Forced Retirement

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The ABA House of Delegates decided Monday that the time has come for law firms to put mandatory age-based retirement policies out to pasture.

In addition to recommending that law firms end those policies, the House of Delegates urged that law firms evaluate their older partners on the basis of individual performance. The House, which sets ABA policy on substantive matters, approved the recommendation submitted by the New York State Bar Association on a voice vote.

The House convened Monday morning at the ABA Annual Meeting in San Francisco. After a full session Monday, the House will wrap up its work on Tuesday.

Mandatory age-based retirement has largely disappeared from the commercial realm in the United States, said Mark H. Alcott, the immediate-past president of the NYSBA, when he introduced the recommendation in the House. “But it continues in the legal profession as an anomaly, you might say a loophole,” said Alcott of New York City.

The “loophole” Alcott referred to is the partnership structure common to law firms. While the Age Discrimination in Employment Act of 1967 essentially prohibits age discrimination in the workplace, its provisions apply to employees. But law firm partners were considered exempt from the ADEA’s provisions because they were considered “owners” or “employers” rather than employees.

That distinction has been challenged recently by both case law and the U.S. Equal Employment Opportunity Commission, which initiated an age discrimination case against Chicago’s Sidley Austin Brown & Wood on grounds that 32 former equity partners demoted to other status in the firm were protected as “employees” under the ADEA. Rulings in 2002 and 2006 by the Chicago-based 7th U.S. Circuit Court of Appeals have allowed the EEOC to continue building its case against the firm.

Mandatory retirement policies are more prevalent at larger firms in the United States, according to the NYSBA’s report to the House supporting its recommendation. The report cites findings in a survey for the American Bar Foundation whose findings were reported in 2005. Of the firms responding to the survey, 37 percent had mandatory retirement policies. But 57 percent of the firms with at least 100 lawyers had mandatory retirement policies, while only 13 percent with fewer than 10 lawyers had them.

Alcott and other proponents of the recommendation in the House of Delegates maintained that eliminating mandatory age-based retirement policies makes sense as a matter of management as well as law.

Rather than get in the way of advancement for younger lawyers, said Alcott, an older lawyer “who is a good citizen of the firm” can provide important advice and support to younger members of the firm. Moreover, said Alcott, individual evaluations are consistent with how many firms already decide the status of partners.

“Partners are evaluated all the time, regardless of their age, on an individualized basis,” Alcott said.

But opponents of the measure said it amounted to an effort by the ABA to mandate to law firms how they should handle their own operations.

The message the ABA is sending is, “Come into our tent, and we’ll tell you how to run your law practice,” said W. Scott Welch of Jackson, Miss. And Esther F. Lardent of Washington, D.C., objected that the proposal sets out a “one-size-fits-all” approach to retirement policies for lawyers.

Opponents also argued that retirement is a private contract matter between a firm and its partners. But Michael S. Greco of Boston, an ABA past president said, “This is a matter of principle, and principle trumps contracts.”

As lawyers, Greco said, “We advise our clients not to discriminate, and yet here we are. The day after a lawyer turns 65, his bags are packed, his files are in boxes and he’s out the door. All we’re asking—not ordering—is firms to rethink whether we’re treating colleagues fairly and humanely.”

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