In 2017, the ABA’s Task Force on Lawyer Well-Being offered a plethora of useful recommendations on how to improve the mental and physical health of attorneys. Sadly, the overall doom and gloom tone of the report makes it a difficult read.
Recommendation #9: Guide and Support the Transition of Older Lawyers is a perfect example of what I mean. It advises law firms to “create programs for detecting and addressing cognitive decline in lawyers, develop succession plans for aging lawyers, and develop reorientation programs to support lawyers facing retirement.” As support for this recommendation the report notes that 1 in 10 people over the age of 65 suffers from some form of dementia.
The implication of this recommendation feeds our worst fear: we must retire because we are old and can’t keep up mentally or physically. But do the math! Nine out of 10 people over the age of 65 do NOT suffer from dementia.
Assuming you are one of the nine who do NOT, take control of your own destiny. Clearly, there are no uniform policies or defined paths for what the post-practice phase of life ought to look like. In some ways, that is a good thing. It means we are free to reject the sad and tired image of “old age” and instead explore the limitless possibilities that await us in our golden years.
If you are over 55, now is the time to sketch out a plan and timeline that could work for you… on your terms. At this stage, you do not need to make an official declarations about retirement, but you do want to be thinking about it in a systematic way in order to map out a thoughtful strategy.
Start with a tangible, easy action. Do the math. Project what your essential monthly costs are likely to be when you retire as well as your projected income from IRA distributions and social security benefits. Use https://www.aarp.org/work/social-security/social-security-benefits-calculator/ to see what your benefits payout will be at different ages to get a sense of at what age you could retire and how much additional income you will need to live the lifestyle you want. Allow yourself to dream. A conversation with a financial advisor can help you think through all the options. Your vision will be key to your negotiations with the Firm.
At age 55, you are likely at the pinnacle of your career. Use your current annual business development plan to do a deeper dive into various math scenarios that could work for you at age 60, 65 and 70. Your current plan likely includes key client profiles that show a 5-7 year history of fees collected and projected legal needs for the next 5 -7 years. As you update this document each year, pay attention to their growth strategy, industry trends, personnel changes, etc. Understanding the impact of all of these variables on your income will serve you well not just today, but down the pike. Once you see everything on paper, you can begin to imagine the possibilities for the future.
Perhaps a 3-5 year step-down billable hours requirement scenario could work for you. What would the financial picture look like if you began at 62? 65? 67? How many hours would you need to bill to generate the income you want? Whom might you deputize to service your clients? Would the firm award “transition credit” for time spent fostering the relationships between your clients and your selected deputies? Could you negotiate a percentage of any new business brought in by those junior partners for 5 years post retirement as a reward for fostering the relationship? Perhaps there are additional phase down options or capital paybacks available. Ask yourself: what do I want? Once you have an idea about what your financial needs are you can be creative about how to meet them in a way that aligns your personal goals with the firm’s needs and serves your clients well.
There is no need to wait for the industry or your institution to design retirement paths and policies. Someone has to get this conversation started. It might as well be you! Do the math today. Your future self will thank you.