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When attorney Eugene D'Ablemont turned 70, the New York law firm where he had worked for four decades stripped him of his financial stake under a policy designed to encourage older partners to retire.
Most of the nation's big law firms have similar policies, which they say are necessary to make room for younger partners to advance. They also worry, as competition in the industry intensifies, that older partners may be less productive than younger ones.
In many cases, these mandatory-retirement rules have stood for decades without being challenged. That's beginning to change, however, as Mr. D'Ablemont and others like him begin to push back, heating up a debate over how law firms should handle a fast-growing population of aging lawyers who want to keep working.
In January the U.S. Equal Employment Opportunity Commission sued Kelley Drye & Warren on Mr. D'Ablemont's behalf, accusing the law firm of violating age-discrimination laws. Three years ago, the EEOC settled a similar suit against Sidley Austin, which agreed to pay $27.5 million to 32 ex-partners, many of whom the agency claims were demoted because of their age.
A Sidley Austin spokeswoman declined to comment.
The settlement didn't resolve the larger issue of whether law partners are protected by federal age-discrimination laws. So lawyers and law firms are looking to the Kelley Drye lawsuit, which is still in its early stages, to clarify whether age-based retirement policies are lawful. Kelley Drye relaxed its policy soon after the suit was filed.
"Not only was the [Kelley Drye] policy wrong, but it was bad business," says Mr. D'Ablemont, who is now 79.
Mr. D'Ablemont currently practices at the firm as a "life partner," receiving a pension and an annual bonus that has ranged from $25,000 to $75,000. He says the bonus amounts to between one-seventh and 1/20 of what he estimates he would have earned if he were still an equity partner.
The EEOC lawsuit alleges that bonuses the firm has awarded life partners were significantly less than the compensation paid to younger attorneys with similar client lists, billings and other measures of productivity. Kelley Drye denies that allegation, adding, among other things, that Mr. D'Ablemont's billable hours in the past five years were on average one-seventh to 1/10 of what he billed earlier in his career.
The firm also alleges—and Mr. D'Ablemont denies—that "for certain of the clients he now purports to claim credit for, he does little, if anything" beyond "preparing and sending them a bill."
Kelley Drye argues in court filings that Mr. D'Ablemont isn't covered by age-discrimination laws because, as an equity partner, he wasn't an "employee," but rather an "employer." It cites his access to the firm's financial and other confidential information and role in supervising lawyers and staff.
Many law firms have chosen to retain age limits on partnerships because it can be awkward and complicated to determine whether an aging lawyer is sufficiently productive to remain a full partner. Among U.S. firms with more than 100 lawyers, 58% had a mandatory-retirement policy, according to a 2007 survey by ALM Legal Intelligence, a unit of legal publisher ALM.
"Retaining talented young lawyers can be more difficult if those lawyers have lots of people above them," says P. Arley Harrel, of the Seattle office of Williams Kastner, explaining why some firms keep forced-retirement rules. A few months ago, Williams Kastner began taking steps toward eliminating its mandatory-retirement age.
Other law firms—including Pillsbury Winthrop Shaw Pittman and K&L Gates—also have chosen to drop or amend their mandatory retirement policies over the past few years in favor of a more flexible case-by-case approach.
Kelley Drye has started giving equity partners the option of retaining their status past the age of 70. The law firm decided the previous policy "was no longer in the interest of our business," says James J. Kirk, 55, a managing partner, who adds that the firm had discussed eliminating the forced-retirement rule for "quite a while." He declined to comment on the lawsuit.
Mr. D'Ablemont is awaiting the outcome of the suit after refusing his firm's offer to restore his partnership status. He says the firm couldn't guarantee him he would get back his equity stake.
Some partners facing forced retirement at their law firms are finding work elsewhere. Joel H. Goldberg, who had to leave the New York firm Willkie Farr & Gallagher LLP in February after reaching its mandatory retirement age of 65, joined rival firm Stroock & Stroock & Lavan as a partner in March. "I still enjoyed what I was doing, and could still do it well," he says. Wilkie Farr declined to comment.
With the economy weak and a growing slice of the population nearing 65, the age at which many law firms force partners to step down, the retirement issue is expected to begin cropping up more frequently.
"As baby boomers hit the retirement age, there will have to be some accommodation [for them]," says 65-year-old James W. Hunt. The Los Angeles attorney left Mendes & Mount with five other partners in May to launch a new firm after failing to persuade his old firm to amend its mandatory-retirement policy. Mendes & Mount didn't reply to messages seeking comment.
A third of California's 169,178 active attorneys are older than 55, and 21% are older than 60, according to the State Bar of California.
"Sixty-five is the new 55," says Mr. Hunt, "and there's no doubt that I intend to continue working."