Why Plan for Succession and Retirement, Part I

As reported in the ABA Journal, attorneys have higher depression rates and more stress than the average American. At LegalShield’s Elevate conference in 2017, Wendy Newman Glantz de-mystified emotional intelligence and provided concrete tips for lawyers to improve both their person and work lives as outlined in an earlier Law Practice Today article. Following on that theme, I had the pleasure of attending a session on succession planning by Roy S. Ginsburg to all LegalShield provider attorneys this past fall.

Briefly, Roy’s goal as a legal strategic advisor is to “help lawyers become more successful and satisfied in their careers.” Roy used quotes on many of his slides, which helped to frame the discussion and I have included those below as headings. This two-part series will first focus on why lawyers need to have a succession plan, and what retirement is today. The second installment will dive into how to retire, including some tips on selling your practice.

I thought some of Roy’s reasons why lawyers fail when it comes to planning for retirement were interesting and should be highlighted first:

  • Only thing that is considered is the dollars needed retire. Or in other words, we think with enough money, all will be fine.
  • Believe this life of leisure will be fun and satisfying.
  • 62% disagree on timing for retirement; 33% disagree on retirement lifestyle.
  • Many are overwhelmed by family issues.

Failure to plan is planning to fail. —J. Wooden

This quote was an overall theme within Roy’s presentation. Looking at the statistics on our aging population is mind-boggling. The ABA estimates that 400,000 baby boomer lawyers will retire over the next decade and a half. Over the next almost 20 years, 10,000 people will turn 65 each and every day. Also, Roy mentioned that each 65-year-old has on average an additional 20-year life expectancy.

Many lawyers scoff at the idea of retiring at the traditional age, and envision practicing well into their twilight. However, it may be in your best interest and that of your clients and firm to retire when you are at the top of your game. Regardless, a succession plan needs to be well thought out and start several years before actual retirement.

When to Hold ‘Em and When to Fold ‘Em —Kenny Rodgers

All good things must end, and in simple terms, it’s important to decide if it’s time. However, also consider that if you wait too long, you may risk your retirement years. Roy mentioned that among those 65 or older, 25% experience memory loss; 20% have a serious illness; and 20% struggle with depression. However, finances play a large role in any decision to stop working. This again reminds us to do an inventory of our financial resources plus health insurance; social security; and estate planning. Also, it’s important to decide if it’s really time by taking stock as follows:

  • How is your physical health?
  • How is your mental health; do you have the same passion?
  • How is your significant other’s or family members’ health?
  • Is it time to give back in the form of pro bono or a career shift?
  • Do you desire more family time or wish to spend more time on hobbies, rest, or relaxation?

Further to the last two points, some wonder how they will replace work because it’s more than just something to do. For those who have left a firm or taken a leave, your sense of identity and purpose is wrapped up in your career. Many need the mental stimulation and social interaction, not to mention the challenge of the law, plus the routine or structure associated with a daily trip to the office or court. For others, the idea of leaving by retiring means losing all this plus a reduction in compensation, social status and clout. In some cases, retirement can be seen as political suicide.

I haven’t been everywhere, but it’s on my list. —Susan Sontag

Shifting gears, Roy outlined many exciting idea for retirement. However, regardless of your age, you may wish to check your level of addiction to work. For example, are you glued to your smartphone or tablet all week and into the weekend? Do you take vacations, and if yes, are they more than a few days? Roy recommends “practicing”  retirement, including considering a range of activities:

  • Earn an honest living: Alternative dispute resolution, politics, adjunct professor, entrepreneurship or small business, or write.
  • Relax: Travel or be a couch potato, spend time with family and friends, go back to school, exercise to maintain your health, and so on.
  • Volunteering: At any of the following—clinics, shelters, bar associations, social services, civic organizations, continuing legal education, SCORE, education or youth services, cultural, sports, or arts. The list is endless!

Everyone must eventually retire, so regardless of your management responsibilities, planning is needed to minimize the impact on the firm. Finding your successor requires time and training. Remember why lawyers flunk retirement—overall those attorneys that pass, retire to something, not from something.

In Part II, I will share Roy’s tips on how to retire, plus some words of wisdom on selling your practice.

About the Author

Lori Owens is the senior director of provider services at LegalShield, which develops and markets pre-paid legal service plans through a network of independent provider attorneys across the U.S. and Canada. Contact her at loriowens@legalshieldcorp.com.

 

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