TMG's Take...on Restrictive Retirement Plan Provisions
A perspective on legal management issues from The McCormick Group.

If you ask any lawyer, they will tell you that non-compete agreements are not ethically permissible in the legal profession.

But that isn’t entirely accurate, particularly when it relates to senior lawyers who want to practice beyond retirement age. Just last week, a prominent securities litigator sued his former firm, Stroock & Stroock & Lavan, for allegedly denying him retirement benefits because he took a position with another firm, Locke Lord Bissell & Liddell. (Former Stroock Partner Sues Firm Over Retirement Benefits)

Stroock’s retirement plan allegedly had a provision whereby partners forfeit retirement benefits if they join another law firm. This type of provision is not unique to Stroock; we have spoken to many partners who are faced with similar restrictions. This is particularly true among firms that still have mandatory retirement provisions.

In light of the changing demographics that are encouraging partners to work past the traditional retirement age, and the fact that these lawyers often have important client relationships, we wonder why such restrictions should continue to be valid under state bar rules. The purpose of the ethical prohibition of non-competes is to ensure that clients have unfettered access to the legal counsel of their choice. But penalizing lawyers---whether they are 35 or 65---from changing law firms, clearly impinges on that right.

TMG's Take is a regular e-mail advisory produced by The McCormick Group. The company's Legal, Government Affairs, and Law Firm Management groups combine the expertise of more than 15 Consultants to help law firms fulfill all of their lawyer and administrative recruiting needs. TMG's Take covers topics across the spectrum of law firm management, including associate and partner compensation, growth strategies, marketing and business development, operations and facilities management, finance and accounting, professional development, and technology. Please direct all inquiries to Steve Nelson, Managing Principal at (703) 841-1700 or snelson@tmg-dc.com.

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