Following the publication of a recent book on Partner Retirement in Law Firms: Strategies for Partners, Law Firms and Other Professional Services, the publishers Globe Law and Business recently hosted a webinar on the topic, chaired by Ronnie Fox and featuring the book’s contributors, including Fox & Partners’ Caroline Field. A full video recording of the webinar is available here. Key points to take away include:
- Plan, plan, plan – and start now!
- Firms contemplating the retirement of a partner should “be prepared, be right and be nice”. A well-drafted partnership/LLP agreement, including appropriate provisions for voluntary retirement, expulsion and compulsory retirement, which are carefully observed, is essential to minimise the risk of challenge.
- Most partner exits conclude in a departure on agreed terms. Forced retirements are rarely in either party’s interest. Where a vote of members is required in the current climate, this is likely to be unsettling for other partners and may indicate management shortcomings.
- Firms should plan succession with clients and prepare for changes to internal roles and responsibilities, including informal ones.
- Partners must know their agreement. It’s the roadmap to everything that may evolve, and a detailed review is the first step in devising a plan to meet a partner’s objectives for exit.
- Partners should negotiate exit terms whilst still an insider with access to accounts and other financial information. Lack of alignment of interests makes appointment of an independent accountant to ensure fair preparation of accounts, used to determine an outgoing partner’s interest, a must.
- The partner should make sure that they plan financially for their retirement, asking themselves: What are my goals and what lifestyle do I want? can I afford to retire? Do not underestimate the benefit of good financial planning with a specialist adviser to avoid the traps of the things you don’t know.
- Moving to management of your own tax affairs is a big change for most partners. Partners should ask themselves: what reserves are held by the firm and what happens to them on my retirement, do I understand the implication of retirement, what is my tax liability going forward and when it is due? A tax adviser can work with a partner to identify the most tax advantageous date for retirement.
- Some partners experience a strong emotional and psychological impact of retirement, including a feeling of loss. Investing in their own well-being by taking up new hobbies and talking to others who have been through it may assist with embracing retirement as a new beginning.
- Avoid pre-disqualification for new opportunities; open up avenues. Focus on what possible opportunities might feel like. Retirement should be fun!
Thanks to all our panellists for a really interesting session:
|Paul Beber, Cecil Associates –||Chartered Accountant|
|Roderick Chamberlain, Career Guidance Services Limited –||Career Guidance Consultant|
|Caroline Field, Fox & Partners –||Partnership Law and Employment Law specialist|
|Micheline Hogan –||Psychodynamic Psychotherapist|
|Veronica Mann, Talis Financial|
|Chartered Independent Financial Planner|
|Nicky Owen, Crowe UK LLP –||Professional Practices Tax specialist|
|Corinne Staves, Maurice Turnor Gardner LLP –||Partnership Law and SRA Regulation specialist|
|Ronnie Fox, Fox & Partners||Partnership Law and Employment Law specialist|