Tag Archive: Retirement

Where does a golfer go to retire?

At some point, you will say, “What kind of life do I want to live?”  In a recent article in the Los Angeles Times (Thursday, August 14, 2014), a retired “workaholic” entrepreneur said “’You cannot not have a plan when you retire.’”

He turned to retirement; though he didn’t plan it that way, he traded his many hours of daily work for golf, playing each and every day for 365 days.  He said “One obsession prepared me for (another).”

The writer then continues, “All this makes me wonder: What do pro golfers do when they retire?”

Life After Law: What Will You Do With the Next 6,000 Days? seeks to address this issue.  One such option, before traveling into the “sunset,” is selling your law practice and monetizing the years of your efforts … capitalizing on the goodwill you’ve developed.  See our LawBiz® Registry for more help in this effort.


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Legal demographics are changing

An ABA task force recently found that  only 56% of recent law school graduates achieve full-time employment as an attorney within twelve months of graduation, over the last five years, applicants to law schools have declined by roughly 50% from approximately 100,000 to approximately 50,000 per year.

This will have a dramatic impact on the availability of lawyers for the American public. And couple this statistic with the more than 400,000 lawyers who will retire in the next 10 years, and you will see a dramatic change in the legal landscape.

For those who complain that there are too many lawyers, this should satisfy their desire to thin the ranks of lawyers. For those who want to better serve those currently under-served Americans, this will add yet another challenge to the system. And for lawyers, the likelihood increases that the Bar will add yet another requirement of pro bono service and added cost to doing business as a lawyer.


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Selected retirement statistics

The Wall Street Journal, October 28, 2013, published some interesting statistics;

To meet basic retirement needs, one needs to save 8 to 11 times salary by the age of 67; if your annual income is $100,000, you should have saved a minimum of $800,000 by the time of retirement.

There are a number of “disconnects” in the statistics.  For example,
•    69% of the people surveyed said they expect to work for pay after retirement; yet, only 25% do.

•    Only 46% of retirees will be able to afford their essential needs in retirement; yet 78% of those surveyed expect to be happy in retirement.

•    Of workers 55+ years of age, 54% said they thought they’d need $250,000, exclusive of house and pension, for retirement. Only 24%, however, said they had that.  Sadly, about 1/3 of this group had less than $10,000 saved.

•    Only 38% believe they will be able to afford “extras” (like travel) in retirement; yet 72% believe their dream retirement includes taking really nice vacations.

•    62% say they’ve done everything they need to do to prepare for retirement; yet 68% say they expect to work after they retire.

•    Before retiring, when asked, only 29% said they were very confident of attaining paid employment once retired, 45% were somewhat confident. But, after retiring, only 7% said they were very confident and 21% said they were somewhat confident of finding paid employment.
       
Other thoughts:
Retirement age has increased since the 1990s, 57 years of age in 1993. Now, we’re at least 66 years of age. The later retirement age continues to build the nest egg … and one’s emotional health seems to be better with the later retirement age.   

On retiring at the age of 65 today, the average life expectancy is another 19 years, meaning one may live 1/4 of one’s life in retirement. Hence, the title of my latest book, Life After Law: What Will You Do With the Next 6,000 Days? Planning for the “second season” is not something to be taken lightly.


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Ageism comes to the legal profession

Most people will agree that there are too many lawyers, an oversupply. (Parenthetically, I disagree; it seems to me that there is a dislocation between the supply and the demand for legal services, a situation that the organized bar has never been able to reconcile with successfully.) But I digress.

Assuming, for the moment, that there is an oversupply of lawyers, why should we care? Would that not mean the fees for legal services would come down? Would it not be best to let the marketplace handle supply and demand?

But, If the Bar wants to reign in the supply, how could they? Of course, get rid of some of the lawyers. (Making admission to the organized bar is another way, longer term. Economics seem to be handling this quite nicely, thank you. Law school admissions are down by 10 to 15%. Applications hit a 30 year low. Potential law students understand that spending many thousands of dollars to take the gamble that they will not be able to get a well-paying job at the end of three years is a fool’s gamble.)

Economics, once again, helps us answer the question of how to reduce the supply. There are more than 1 million lawyers in the United States. Of this group, it has been estimated that at least one half of this group are sole practitioners. Another statistic suggests that at least 400,000 lawyers will retire by the year 2020.

If we look at this latter group, and suggest that we treat it any differently than any other group in the organized bar, we would be accused of ageism, and prohibited discrimination. However, if we come up with a metric that is applicable to all lawyers, such as “competence,” then we are safe. Of course, if this metric also achieves our basic goal of reducing the number of lawyers available to serve clients, so much the better.

But, this metric is never applied uniformly. If we look at new lawyers, those who have been admitted to practice for three years or less, I am sure we will find many who are not “competent,” despite the fact that they have passed the bar exam. How many times have "mature" lawyers said, mostly to themselves, that they were happy that they were not the client "back then," that they didn’t know enough to be really competent to handle the matter they did …. that they learned "on the job."

What is the metric for “older” lawyers? Do they have to pass another bar exam? If yes why should age be the factor that determines whether they have to take a new examination? If not, what might it be? Nowhere in the time spectrum of a lawyer’s career is there a requirement for such an examination.

How many times have you, as an adversary, said to yourself my opponent is not very good? In fact, how many times have you said my opponent is not “competent?” Until the appropriate metric can be accepted and applied throughout the entire career life cycle, it seems to this writer that the real focus should be on meeting the needs of our clients who are not served or who are under-served, making sure that all lawyers, young and old alike, are “competent” and move away from even the appearance of ageism.

 


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What is the most feared word in the English language?

At the end of the day, the value of our law practice is based on our success and the many people we have touched over the years. This is a significant legacy we will leave on retiring from the practice. 

Most lawyers all around the country with whom I’ve spoken don’t understand this and can’t comprehend even the possibility that their many years of effort may actually have produced a monetizeable value of some significance. This value can enhance their retirement. It is a challenge to overcome such deep-seeded beliefs among many Baby-Boomers as they get ready to move on to their second season. This is the difference between personal goodwill and organizational goodwill. There is more of the latter than most people believe.

My conversations have convinced me that the most feared word in the English language is “retirement.” That may contribute to the refusal to consider an alternative to closing the office; we will maintain our office and work until our last breath. It is possible, however, to do both! The sale or merger of your law practice, rather than the closing of the office, should be an alternative that is kept open for your consideration.

 


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I’m really tired, a frequent refrain today

“I am really tired, and want to retire.”  But, retirement is out of reach for many lawyers after their homes and retirement plans took heavy hits over the last few years. “Business purgatory” is how one phrased it.

Delays in retirement are now common, with 38% in one survey saying their retirement will be at least 5 years later than expected. The income stream for many lawyers comes from their law practice. Selling, closing or merging the practice are options, but none are likely to provide the same income stream the lawyer is accustomed to receiving.

Unless the lawyer is willing to adjust one’s life style, he will remain in practice, working to build up the practice further in order to reap the rewards needed to fund retirement.


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