Life After Law, What Will You Do For the Next 6000 Days? My soon- to-be-released book is a guide to why aging baby boomer lawyers should be planning for their next career. The ABA has concluded that 400,000 lawyers will retire in the next 10 years. That is equivalent to the entire membership of the ABA, the largest volunteer organization in the world!
According to a different report, without reference to law, 10,000 people retire daily!
Look for a dramatic change in our culture as we seek to learn how to live longer, productive lives in different careers. Of course, the economy will also change as older folks become the dominant consumers in this country.
Ed discusses the most important factors of starting a solo firm.
Jane's comments about holiday cards vs email cards is are worth noting. It is a tough time of year for many with cards and gifts decisions to make ... But, as my mother used to say, "... if you don't remember me364 days of the year, forget me on my birthday!" In other words, the one day a year remembrance doesn't do much, especially for busy people.
Rules against lawyers sharing fees with non-lawyers might need to be loosened to allow U.S. firms to compete globally. The proposal says that any firm with non-lawyer owners must have “as its sole purpose providing legal services to clients.”
This is the foot in the door.The next thing you'll see is Latham & Watkins, or other billion dollar law firm opening offices in Wal-Mart or Target stores for curbside service. This is not necessarily a bad thing. It will certainly bring the law to the people ... And it will certainly change the perception of the law.
I've always maintained that the rules of professional conduct are controlled by the large firms, AmLaw 100 and 250. When their economic needs change, the rules get changed and the sole and small firm practitioners have to adapt accordingly. In other words, the rules are not made in a vacuum, not made because of their inherent righteousness or goodness. They change and are made to serve the economic interests of the few ... oh, if the public is served, so much the better.
But if you're a solo, watch out ... your interests may not matter. Such has been the case in recent times when solos' interests were not protected, in fact hurt, by changes in the rules .. But, here, to allow the larger firms to complete on a global scale, we see the rules begin to change and allow allied professions to join in the ownership of law firms, not merely as allied professionals independently serving the same client.
Economics control .. as always ... even here in the rules of professional conduct.
More than 23% of the Washington State Bar Association, a mandatory bar, are 60 years or older. Several years ago, the American Bar Association, a voluntary bar, estimated that 400,000 lawyers would retire in the next 10 years. For the ABA, that’s equal to its entire membership. And that's equal to about 40% of all lawyers and a majority of private practitioners.
How will the ABA, in effect, replace itself? Will the WSBA replace these 23% as they leave the practice? Law school admissions are down by more than 10%. Will our recent economic turmoil be played out in the supply and demand of legal services? This is the 50,000 foot, or macro, perspective.
At the ground level, lawyers in the Baby Boomer generation will need to look at their “second season.” What plans do they have for their future? Or, as I ask myself each day, “What do I want to be when I grow up?” What is it that “turns me on?” What do I enjoy doing? How is it that I want to make a contribution?
One-third of the 23% in Washington have said, their “exit strategy” from the practice of law is to “die at their desk.” In cowboy literature, it’s the equivalent of “dying in one’s boots.” In other words, doing what they're doing is what they love doing and that is how they want to be remembered, not as a faded shadow of themselves in retirement. Some might say that it is a shame that that is all they have, their law practice. On the other hand, think of the valuable contribution they're making to the lives of all their clients. Better that than nothing. Better that than feeling useless. Better that than aging overnight because your hobby and profession, one and the same, were removed from you.
A friend, and former trial court judge in California, Ellen Peck developed the idea of an “Estate Plan for the law practice.” She says it’s equivalent to malpractice not to plan for how one’s clients will be served in the event of death or disability of the lawyer.
Recently, I was engaged by the family of a deceased lawyer to value the practice and assist in its sale. On inspection, we found that there were inadequate time records; a trust account that was in shambles and needed an audit to reconstruct and reconciled; and inadequate client records to know precisely what had been done and yet needed to be done. This is a perfect example of where an “estate plan” for the law practice would have served everyone’s interests, the family, the clients and the judicial system.
Those lawyers who fail to address this issue put their families and loved ones at risk. Not only will the family have to deal with the emotional trauma of a sudden death, they will also have to deal with the economic turmoil left by the lawyer. If negligence is found after the lawyer’s death, or if the lawyer failed to balance the clients’ trust account (to the penny!), the family could be responsible.
In the case of a famous actor, who was educated as a lawyer, he failed to have an estate plan ... and his family paid the consequences (estate taxes). This left quite a hole in the wealth of the family. Fortunately in this case, there were no other repercussions. But, this result is not necessary.
Do all lawyers need to have a succession plan was one question raised in my recent WSBA presentation. Yes, and no. No, in the sense that some lawyers … those lawyers in firms … will have other lawyers in their immediate environment to take on his/her practice and files. Thus, the lawyers will be protected. The interests of the lawyers will be protected and the heirs will receive their appropriate due. This assumes, of course, that the firm has addressed the issue of how to compensate the lawyer for the value of his practice. That, unfortunately, is not always the case. But at least, the files will be parsed out and the clients protected.
One-third of the lawyers in WSBA … and more in the ABA … are sole practitioners. They must have a plan or force their heirs and loved ones to close their office and transition their clients to other lawyers who can serve their interests.
And Yes in the sense that all lawyers need to decide when to retire … to leave the practice … how they will do that, whether by merely closing the doors (a tragedy in my opinion) or selling the practice … and what they will do in their “second season.”
One WSBA member said we’ve always gone TO somewhere. We went to grade school, went to high school, went to college, went to law school … became a lawyer … and now, what will we do … where will we be going TO? That is a question that all lawyers must address … or “die at their desk.”
Yes, say some.
Only a short time ago, we believed that non-lawyers would be able to participate in the ownership of American law firms. The pressure, so we believed, would come from the British Empire. Australia already allows this and it will soon be permitted in England. But, not the U.S. ... until now.
The District of Columbia permits non-lawyer ownership to the extent of 25% interest in a law firm. And, now, North Carolina has a bill before its Senate that would allow 49% non-lawyer ownership.
One argument is that law firms have expanded and are now very large organizations. In order to grow, they need additional capital ... and capital is best raised in the capital markets, not from individual partners of law firms ... and that means non-lawyer ownership. While large law firms are looking more and more like their corporate clients, it is still a stretch to suggest that law firms should raise outside capital.
Do law firms need to grow? Why can't corporate clients' interests be served well by smaller regional law firms? Why does the corporate law firm have to be as large as the client? We saw unions grow in both size and power in response to corporate and management growth and power. And we now see unions fighting to stay alive. Will that also happen to large law firms of the future? Will technology enable small groups of lawyers to be effective in large corporate representation?
Some argue that the rules of professional conduct wouldn't bind non-lawyers in matters of confidentiality and charging reasonable fees. Further, the very independence of lawyer's judgment might come into question. But, the rules have been bent, if not changed or discarded entirely, when large firms' economic interests were at stake. So, it will be fascinating to see who argues on which side and how this issue develops.
Is it possible that this issue will finally cause the break up of the mandatory (integrated) bar association into State licensing agencies on the one hand and voluntary bar associations on the other hand ... with the latter being the home of sole and small firm practitioners banding together to serve their own economic interests?