Will Retiring Baby Boomers Burst Big Law’s Balloon?


There are 76,000,000 baby boomers in the United States. Many of these baby boomers are at law firms which impose mandatory retirement policies. Many large law firms are looking ahead to having about 15% of their partners retire over the next several years. The consequences to law firms can be catastrophic.

Law firms face two challenges, one manageable, the other perhaps not. The first, transitioning client relationships is a process that may -- and I emphasize may -- work. The issue is the willingness of a vibrant 65 year old lawyer who enjoys his or her work may simply plan on transitioning himself or herself and his or her clients to another law firm that does not have a mandatory policy.

The more critical issue is that upon retirement or even withdrawal of baby boomer generation partners, they will receive repayment of their capital accounts. And since these partners are the most senior in the firm and most often, the most highly compensated, the percentage of capital they have invested in the law firm exceeds the 15% of population this generation represents. With law firms access to capital now being extremely restricted, sucking out all of this cash in the form of capital account withdrawals will probably bankrupt some firms – and leave these retirees without their capital.

This ticking bomb is upon us

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Jerome Kowalski, Kowalski & Associates | Attorney Advertising

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