US firms are poaching top partners from their UK City counterparts because of the perception in England that partners have to leave in their late 50s, new research suggests.
A study by consultancy Jomati, based on interviews with dozens of senior lawyers, found that neither firms nor partners communicate enough in the lead-up to partners retiring. Some partners hide retirement plans, while some firms are reluctant to risk confrontation by pressing partners on the issue.
In some cases, that fear was proven correct, with one partner describing the process as ‘torrid, ill-thought through, antagonistic and confrontational’.
Ignoring the ‘elephant in the room’ of partners’ retirement has left the way open for US firms based in London to pick up experienced practitioners.
The report says: ‘The perception that UK law firms exit their partners in their late 50s has been played upon by many of the US firms, especially in London, allowing them to recruit high-quality partners in their late 40s and early 50s, well before any discussions have taken place in their existing firms.
‘One result is that UK law firms risk losing very good quality resources much earlier than they would like.’
Indeed, the research even found anecdotal evidence of partners choosing to move to US firms to avoid the embarrassment and difficulties of speaking about retirement.
Only a minority of firms are providing, or even considering ways to provide, structured and timely support, leaving partners with haphazard plans and suffering from uncertainty and an apparent lack of opportunity.
The profile of many law firms means this is a continuing concern and one that firms need to address sooner rather than later.
‘The “baby boomer” generation of partners who fuelled the growth of firms in the 1980s and 1990s are either at or rapidly approaching the time when retirement will be a reality,’ the report says.
‘Given that these partners are likely to have had leadership roles in client relationships, practice groups, or in offices over much of the last 20 years, how they leave will remain a significant issue for law firms.’
Firms generally stressed that their culture made for open conversations about retirement, but the research found a dislocation between what management said and what partners heard. Most of the time, firms raised the issue of retirement before the partners in question did so.
Most firms retained a mandatory retirement age, or at least an age at which they require consent for partners to stay on.
Partners failed to address retirement out of a mixture of fear – loss of status, change, loss of community – and uncertainty about what comes next. At the same time, many fear their performance will drop and they will effectively be ‘managed out’.
Partners also expressed concern that bringing up the subject will make their departure inevitable, with starting conversations seen as a ‘proxy for saying the time has come to say goodbye’.
The report, produced in conjunction with the financial advisory firm BoulterBowen WealthCare, adds: ‘Even when partners and their firms have discussions, all too often it appears that retirement is the elephant in the room.’