Retirement today needs to be seen as more a journey than a destination, one which can benefit the firm as well as the transitioning attorney. Law firms large and small can help those attorneys learn new skills and competencies as they reduce their practice commitments, enabling them to contribute extended value to the firm in new ways, while minimizing the cost to the firm, and ensuring a smooth transition for the clients.
As senior lawyers approach traditional retirement age, in our experiences with senior lawyers, we have learned that pre-retirees are clearly not looking to fade away. They want to find fulfilling activities. They want enriching endeavors. Certainly they want to leisure… at times, and they naturally want to have fun. But, contrary to the popular media view of retirement, the most important thing lawyers anticipating retirement are looking for is their own fulfillment…their own sense of purpose and meaning. The idea of a more flexible retirement option, which would allow not only partial retirement, so that employees can enjoy other pursuits, but also active retirement, wherein employees remain productively and socially engaged in the workplace should help firms move away from the more restrictive mandatory retirement bind.
In a recent book on the talent shortage we are facing, Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent, Ken Dychtwald and his co-authors Tamara J. Erickson and Robert Morison recommend that employers look to phasing as a variation on the traditional retirement model. They describe flexible retirement, as an approach that encompasses flexible roles and work styles, attracting work assignments suited to one’s experience and inclination, and reduced hours, flexible schedules, and more control over one’s time—before and after the point of official “retirement.”1
Flexible Retirement Options
The traditional meaning of retirement has been a single event – “withdrawal” from the workforce into leisure, relaxation, a slide into the end of life. Webster’s Dictionary defines retirement as “removal or withdrawal from an office or active service; to seek privacy or seclusion.” The word retire comes from the French word retirer meaning “to withdraw,” the same root “martyr” comes from. Perhaps, it is time to revise what we mean by retirement –
indeed it may be time to re-examine the whole notion of age.
Instead of viewing retirement as an end-point in itself, individuals need to begin thinking of retirement as a series of developmental steps taken over an extended period of time. Retirement today needs to be seen as more a journey than a destination. In order to more effectively participate in this journey, retirees will need to learn new skills and competencies well before they begin any type of retirement or transition experience.
Over the past twenty years, I have worked with literally hundreds of senior attorneys in developing Exit or Retirement Plans. I have found that those firms that prize the interdependence and mutual responsibility among the generations are better prepared to help their pre-retirees through this period of transition. These are the firms that encourage their senior lawyers to tackle fresh assignments designed to offer variety and challenge and to stimulate new skills development. Senior lawyers in these progressive law firms are being encouraged to approach retirement as a way of gaining renewed purpose in their lives. They want something new, something different, perhaps something novel, and certainly something interesting at deep personal levels. Law firms play an increasingly important role in creating a culture to allow this transition to take place.
Retirement as a Renewal Process
Richard P. Johnson, Ph.D. author of Creating a Successful Retirement: Finding Peace and Purpose indicates that a new career developmental stage is emerging, which he calls the “renewal stage.” According to Johnson, this new stage of development starts for some people around the mid-fifties and lasts well into the mid-seventies. The renewal stage can be a time of great personal growth and development, or it can degenerate into just the opposite. Johnson describes this stage as, “A time for capturing a dream that may have lived in our souls for years but was unable to come out due to the obligations that pressed in on us financially. Now, in the renewal stage, these long held-down desires can begin to flow.”2 The key to success in this renewal stage is how well a person prepares for it.
The renewal stage is a time when individuals begin taking a much more personal approach to living. They are free for the most part from the press of having to climb the ladder of success. The renewal stage is a time when even “hard-chargers” re-evaluate how they live their lives. They don’t have to prove to anyone what they’re made of. Now they only have to answer to their own needs, their own impulses, their own calling, and their own passion. That’s really what renewal is all about … pursuing your passion, your dream, your own goal—not someone else’s.
According to Jim Emerman, executive vice president of Civic Ventures, a San Francisco-based think tank that focuses on issues of redefining the role of older people, “A better way of looking at what’s happening is to see the biological, social, economic and political trends at play as the elements of a new stage of life and work—one that falls between midlife and true old age—and for which we don’t have a good name.”3 The key to success in this new stage of life and work – renewal stage is how well a law firm can change its culture to allow this transition to take place.
The aging of the workforce is a phenomenon that law firms can no longer ignore. According to Ken Dychtwald, visionary on the implications of an aging population www.agewave.com, this phenomenon is being driven by three demographic realities—the disproportionate size of the baby boom generation, increasing longevity, and declining birthrates.4
The Baby Boom Generation – Nearly one third of all Americans—76 million people—were born between 1946 and 1964.5 The first of the boomer generation are approaching their early sixties, so law firms throughout the country are facing new challenges with traditional retirement policies and procedures that define retirement in terms of removal or withdrawal. What this means is that law firms will have to figure out how they can survive this massive exodus of skilled senior lawyers.
Many of these senior lawyers will be looking to gain, “a renewed sense of purpose,” while too many law firms will be looking for removal or withdrawal from active service. One of the first challenges law firms face today is how to create meaningful-purposeful—roles for lawyers between midlife and true old age.
Nearly eighty percent of baby boomers say they want to work in retirement, and three million of these baby boomers are expected to live to be 100 years old. Many boomers have married late. They may have divorced, remarried, and started second and third families. Increasingly, senior lawyers find themselves caring for infants and elderly parents simultaneously, sandwiched between generations and playing multiple roles. For many of these boomers, retirement in the traditional sense may not even be an option.
Increasing Longevity – Cornell University’s Retirement and Well-Being Study, showed 44 percent of retirees saying they would work for pay at some point after their careers. A much larger percentage of the younger cohort is likely to work post-retirement (59 percent vs. 37 percent).6 The most popular reason for returning to work (89 percent) was to keep active, not financial need.
Around 1900, the average life expectancy at birth in the United States was forty-seven; now it is over seventy-seven7 (figure 1-2). The American Association of Retired People (AARP) conducts a retirement survey each year showing the top four reasons for working in retirement. Their 2003 survey results showed: staying mentally active (87 percent), staying physically active (85 percent), being productive or useful (77 percent), and doing something fun (71 percent). Other reasons given for working in retirement included: needing the money (22 percent of respondents) and needing health benefits (17 percent). It might be fair to say that the majority of today’s retirees work for pleasure, mental stimulation, and personal fulfillment as well as for money and health benefits.8
Declining Birth Rates – After peaking at 3.7 in the mid 1950s, the average number of children per women in the United States has declined to 2. Nearly twenty percent of baby boomers will have no children, and another twenty-five percent will have only one child. Declining birth rates guarantee a recurrent shortage of talented young workers – a problem many law firms are experiencing at this time.
In 2001, the American Productivity and Quality Center (APQC), a consortium that focused on identifying business best practices and innovative methods of transferring those methods, explored links between succession management and company leadership development process. The study pointed out that if economic growth continues at a modest 2 percent for the next decade and a half, this would result in the need for a third more senior leaders than there are today. Yet the supply of the age cohort that has traditionally entrance into the executive rankings (35 to 44 year olds) is actually declining in the U.S. and will have dropped by 15 percent between 2000 and 2015 because of the differences in the size of the baby boom generation and the much smaller Generation X. So, law firm strategists will have to look for new approaches to attract and build leadership teams.
Today, there are forty million people 65 and over (14 percent of the population). In 2030 there will be a whopping seventy million people (20 percent of the population) in this age bracket. People over the age of 85 are the fastest growing age group. People are retiring for the first time earlier and earlier. The average first retirement age has declined from sixty-five, some fifteen years ago, to around fifty-eight today. Males today can expect to live an average of 72-½ years, while females will live almost five years beyond that.
Once a senior lawyer begins winding down a full-time law practice, he/she may need time and possibly support as he/she moves away from the external, material, achievement definition of self, toward the more personal, intimate and, for many, the spiritual definition of self. The journey from full-time work to full-time retirement in its traditional sense may take a number of years to accomplish. Attaining a particular age does not miraculously give anyone the requisite tools, competencies, knowledge, and attitudinal shifts to ensure that retirement will proceed smoothly.
Today, we are facing a shortage, not a surplus of talented lawyers, so law firms must begin to phase out “retirement” as we know it. As a replacement, law firms need to explore how a staged reduction in work hours and responsibilities ahead of full retirement might work. Could it be that the same senior lawyers that many law firms are now looking to sunset may become the untapped resources firms will need to lead the talent pool of the future?
Renewal Strategy to Gain Competitive Advantage
William Bridges, author of “Managing Transition: Making the Most of Change” defines Transition as the inner process through which people come to terms with a change. The process takes place over a period of time as they let go of the way things used to be and reorient themselves to the way that things are now. Transition management is based on the idea that the best way to get people through transition is to affirm their experience and to help them to deal with it. In a law firm setting, managing transition means helping people to make that difficult process less painful and disruptive. Many law firms have been following the mistaken idea that the best way to get people through a transition is to deny that they are even in a transition.
Getting through transition is not easy. Each individual will need to start where the transition itself starts: with letting go of the inner connections to the way things were. As we age, we will be faced with how we might cut back in full-time employment. What are some of the things senior lawyers might have to let go of? Income will certainly be affected; definitely there may be a loss of intellectual challenge; possible a loss of a group of colleagues and friends; a regular place to go every morning; the familiar way you have structured your time over many years. You also will be confronted with the possible lose of professional identity. These are some of the things that leaving the full-time practice of law will force the senior lawyer to think about losing.
In order for law firms to help senior lawyers through this transition/renewal stage of life, they need an adequate change management plan in place. They should determine where senior lawyers are in the transition process, and they will need to develop strategies for helping people let go of the old way of doing things. Bridges talks of the need for guiding people through the neutral zone, and utilizing that in-between state creatively. Only after working through such a process will the firm be ready to fully appreciate the true value senior lawyers can bring to the aging marketplace. People will only then be able to fully embrace the new ways of doing and being.
Change in Law Firm Culture – Full Engagement Model
Because lawyers have so much discretion and autonomy in a law firm setting, firm culture is the dominant force in determining how lawyers in any firm actually behave towards one another and towards their clients, so one of the first challenges that law firms will face in the years ahead will be finding ways of changing the firm culture to ensure an adequate supply of qualified lawyers.
Many law firms remain mired in the notion that the only way to create wealth is by leveraging people and hours; that the two main drivers of profitability are leverage (number of associates or paralegals per partner) and the hourly rate utilization achieved by each team member. The thinking has been that if a firm wants to add to its revenue base, partners have two choices: work its people more hours or hire more people.
Confronted with new forms of competitive and market challenges, the practice of law is long past due for a new way of looking at profitability in law firms. It is also long past due for a new way of looking at its lawyers – including senior lawyers. It’s time for a new business model that will attract individuals who are fully engaged, physically energized, emotionally connected, mentally focused, and spiritually aligned with a purpose beyond immediate self-interests. This Full Engagement Model begins with an eagerness to go to work in the morning, equal happiness to return home in the evening, and a capability to simply set clear boundaries between the two. Full engagement implies a fundamental shift in the way lawyers – young and old – live their lives.
In discussing this new business model, let’s start by agreeing that clients are not interested in buying time. They are interested in buying: results, expectations, good feelings, hope, dreams, a preferred vision of the future, and solutions to problems. Today, a lawyer’s ability to create wealth ultimately depends on the firm’s capacity to create, disseminate, innovate, and leverage intellectual capital, so firms must begin pricing their intellectual capital based upon the value to the client, not the internal labor cost of its human capital; or the profit desires of its owners, and certainly not the labor hours involved in creating it.9 Keep in mind that intellectual capital in most law firms resides with the most experienced people – your senior lawyers.
Two aspects of this new law firm culture that young people are now demanding include: a strong performance orientation and an open, trusting environment. It logically follows that, law firms whose culture supports both a performance orientation (which includes inspiring mission, stretch goals, accountability for results, and tight performance systems) and an open, trusting environment will have a much greater chance of attracting and retaining talented people. Two aspects of this new law firm culture that senior lawyers are now demanding include: a strong performance orientation and an open, trusting environment.
With the emergence of this new Full Engagement Model, the success factors of the past will increasingly becomes less relevant. Billable hours will become less meaningful to clients, and the criteria for success in the future have yet to be established. This new law firm culture will create the framework for setting new performance expectations and the ways in which people relate to one another. I suspect that “quantifying senior lawyers continuing involvement” will become a much sought after standard.
1. Ken Dychtwald, Tamara J. Erickson and Robert Morison, Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent (Boston: Harvard Business School Press, 2006), p 52.
2. Richard P. Johnson, Ph.D. Creating a Successful Retirement: Finding Peace and Purpose (Liguori, Missouri: Liguori Lifespan Publishing, 1999), 42.
3. Jim Emermen, “On Life’s New Stage—and Its Challenge to the Field of Aging.” Aging Today: The Bimonthly Newspaper of the American Society of Aging, Sept– Oct 2006, 3.
4. Ken Dychtwald, Tamara J. Erickson and Robert Morison, Workforce Crisis: How to Beat the Coming Shortage of Skills and Talent (Boston: Harvard Business School Press, 2006), p 3.
5. U.S Census Bureau, Population Division, Statistical Brief. Sixty-Five Plus In The United States, May 1995.
6. The Cornell Retirement and Well-Being Study, Phyllis Moen, PhD Principal Investigator. Journals of Gerontology Series B: Psychological Sciences and Social Sciences Online, 2000.
8. AARP, “Staying Ahead of the Curve 2003: The AARP Working in Retirement Study,” September 2003.
9. Dunn, P. & Baker, R. The firm of the future: A guide for accountants, lawyers, and other professional services (Hoboken, NJ: John Wiley & Sons, Inc. 2003), p.28.