Mandatory Retirement in Law Firms and Other Partnerships

Two months after celebrating his 90th birthday, Supreme Court Justice John Paul Stevens retired in June 2010. Had he worked for one of the many large law firms whose attorneys argue before the Supreme Court, Justice Stevens might have been pushed into retirement decades earlier. A recent settlement between New York-based law firm Kelley Drye & Warren LLP and the U.S. Equal Employment Opportunity Commission (EEOC) compels a second look at mandatory retirement in law firms and other partnerships. Under a consent decree, the firm agreed to end its policy of stripping partners who continued to practice after age 69 of their interest in the firm, reducing their ability to manage the firm's operations, and replacing their payment with a discretionary annual bonus that, in the case of one partner, was characterized as “discriminatorily low.” Faced with aging baby boomers and possible exposure to age discrimination claims, law firms and other partnerships will likely relax fixed requirements based on age, such as mandatory retirement and forced changes in equity participation, compensation, and status, which turn away profitable professionals and risk legal liability.