There’s a question I often hear from law firm partners: When is the ideal time to start planning for retirement?
As I’ve discussed on this blog before, the answer is simple: As soon as possible!
In fact, it’s a good idea to think of retirement planning as a part of career planning — something you consider from the outset.
However, here’s the part too many partners tend to forget: It’s not just a matter of WHEN, but of HOW.
You’re not only planning your retirement. You’re building the situation that will allow you to do with it what you want.
- Do you want to stay involved in business development?
- Perhaps you’d prefer to offer consulting services, teach a class at a law school, or help train younger lawyers?
- Would you prefer to work as a career counselor or business development coach for the lawyers following in your footsteps?
- Or do you just want to take it easy and finally go on that cruise around the world?
The point is that you can have the retirement you want. But it does mean figuring some things out now — before it’s too late.
One of the most critical considerations?
Whether or not you’re at the right firm to exercise what you want to do when the time to exit finally comes along.
Decide what you want…and whether your current firm can provide it.
Let’s say you want to keep a hand in the industry by referring clients.
After all, you have the connections. For you, retirement isn’t so much about stepping away from the legal world. It’s just a matter of not having to do all the work.
If you’re in a financial position where you don’t care if you get any compensation for your referrals, that’s one thing. Most firms will happily take that client.
But what if you’d like to generate a little side income?
Some firms will give origination credit to a partner who’s no longer working. Still, you need to know the parameters at your firm ahead of time…BEFORE you invest your entire career only to find out at 65 that your firm can’t support the retirement you envisioned all those years.
Likewise, if you dream of volunteering your services and wisdom to help shape and nurture the younger generation of lawyers, you should ensure your firm will empower you to pursue that goal.
It’s about making sure you’re at the firm that will let you do what you want to do to live your best retirement life.
It’s also about having a plan.
Part of having your retirement plan locked up is understanding what, if any, retirement benefits your firm offers.
You should also check your buyout agreement, if applicable, and ensure you are financially prepared to sustain the kind of retirement lifestyle you’d prefer.
Ultimately, you want to be in a position to retire when it’s the right time and because you want to, not end up stuck there because you need the money or even find yourself pushed out or de-equitized before you’re ready.
If your current firm can’t provide everything you need for retirement, it may be time to leave for a firm that can.
Some older partners do resist retirement. This can happen for various reasons (take a look at my recent post on the subject for more), but the impact is often a generational divide and long-term issues rippling down through the firm.
So, if you are the head of your firm and create a plan, STICK TO IT! Don’t stand in the way of the next generation — leave when you say you’re going to leave.
Of course, there’s another aspect of retirement planning for law firm partners that we haven’t yet discussed, and it’s a big one…
You care about your clients.
You’ve built strong relationships with your clients over the years, so it’s only natural to feel concerned about ensuring their needs get met after you retire.
If you need to mentor someone as your successor, start bringing them into meetings sooner rather than later. Work with them side-by-side and gently integrate them into the process, letting your clients get very comfortable with them before you leave.
You might want to make sure that the firm makes that person a partner so your clients feel confident staying with the firm — not to mention so your successor doesn’t get impatient and leave for another firm themselves!
If none of that is possible, consider leaving your firm some years before your planned retirement so you can go to a firm with plenty of junior people who could take over one day.
Consider having some conversations with firm management and your chosen successor to make clear what you have in mind for the future. This can also ensure your successor understands what they’ll inherit and feels you are looking out for them.
Then, once again, make sure you get out of the way when you say you’re going to. If you promised to retire in five years and pass along your book of business, don’t still be there in fifteen years standing in the way.
Still feeling anxious about retirement?
If you feel you haven’t adequately planned or are unsure of what to do next, I have personal connections with excellent coaches who can help guide you through the process. I’d be happy to make the introduction.
On the other hand, if you feel that your current firm is not the best fit for your plans and are considering a change, I’d love to discuss your needs.
Bottom line: You deserve a satisfying and rewarding retirement, whether that means traveling around the world or putting your law degree to work in a new way. And with good planning, that dream retirement is within your reach.