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When Law Firms Say It's Time to Retire
Headline News | 2007/10/18 10:31

The American Bar Association doesn't want them. Most lawyers apparently don't like them. But many law firms have them. Retirement policies exist in several forms, but the 65-and-older crowd isn't looking to hang up its hat as early as it once was. Only 38 percent of lawyers agree with mandatory retirement policies, while 50 percent of firms have them, according to a recent survey of nationwide law firms by Altman Weil.

Aside from the 38 percent who agreed with mandatory retirement provisions, 46 percent disagreed and 16 percent were not sure.

At its annual meeting in August, the American Bar Association adopted a recommendation proposed by the New York State Bar Association that calls for firms to eliminate mandatory retirement policies and evaluate older partners on individual performance.

Opponents of the recommendation said firms shouldn't be told how to run their internal policies, particularly ones that are a matter of private contracts.

"The profession's position on this seems to be moving towards getting rid of those things," James D. Cotterman, an Altman Weil principal who handled the survey, said of mandatory retirement policies.

Aside from any question of legality, Cotterman said it makes good business sense to do away with retirement policies.

People are living longer, are healthier, have wisdom to share and have a "tremendous" prominence in the community, he said.

"There's really no downside to that," Cotterman said.

Firms should be planning for the next generation regardless of age, Cotterman said.

"If you have mandatory retirement, it's easy because you can say, 'Well, you've reached the age and you're out,'" he said.

It's the job of a managing partner or executive committee, however, to make the tough decisions, Cotterman said. That's what evaluations are for, he said.

According to the survey, the majority of respondents (61 percent) plan to continue working in some capacity after retirement. Of those who continue to work, 48 percent will continue to practice law and 35 percent will pursue another line of work. Seventy five percent will work part time, according to the survey.

If any of the respondents are Pennsylvania attorneys, their future career plans may depend on where they work.

At Stradley Ronon Stevens & Young, for example, partners are required to retire at age 65, 66 or 67, depending on their date of birth and how that coordinates with Social Security payments, managing partner Jeffrey A. Lutsky said.

On its face, the policy doesn't provide for retirement-age attorneys to simply leave the equity partnership tier; they must leave the firm.

Lutsky said that from time to time, partners ask for exceptions and they are granted on an individual basis. If extensions are granted, they are generally done on a one-year to two-year term. Extensions are based on the partner's current contributions to the firm, but not necessarily just his or her book of business, Lutsky said.

There have been occasions when the firm has transitioned partners into a senior counsel role when they plan on working part time, he said.

"This is an issue that's obviously being framed by demographics," Lutsky said.

Issues surrounding retirement, he said, aren't things the firm talks to partners about on their 65th birthday. That planning starts a couple of years out.

Despite the increasing talk about the morality and legality of firm retirement policies, Lutsky said he thinks the firm's policy works for the firm.

It allows Stradley Ronon to transition both client matters and leadership roles to a younger generation, he said.

"We're creating opportunities for younger people," he said.

That doesn't mean the firm has left it's older attorneys empty-handed. Stradley Ronon pays "significant" retirement benefits to its partners that are firm-funded, which is something many large firms no longer do, Lutsky said.

That pool is partially funded by the firm from year to year, and the rest is paid out of partner profits, he said.

Thorp Reed & Armstrong has what its managing partner Jeffery Conn calls a "flexible" policy. The firm requires that partners retire -- but not necessarily leave the practice -- at age 67.

Conn said partners can either request to stay on longer as an equity member or they can take another role as of counsel or senior counsel, for example. He said pretty close to all of those attorneys at retirement age stay on in another role.

Having a policy in place allows a firm to address the issue of retirement at a set, and known, time.

Mark Alderman said he wasn't quite sure he'd call his firm's policy mandatory. At Wolf Block Schorr & Solis-Cohen, the partnership agreement calls for attorneys at age 68 to transition out of the equity partner tier, he said.

"It does not require retirement or any particular alternative status," Alderman, Wolf Block's chairman, said.

Some attorneys retire before 68 and others continue in various capacities well into their 70s, he said.

There are also exceptions to nearly every rule. It is possible to waive the mandatory transition, Alderman said. Many partners have asked for the waiver and the firm has asked many partners if they were interested in the waiver, he said.

Eckert Seamans Cherin & Mellott Chief Executive Officer Timothy Ryan said up until about 15 years ago, his firm had a retirement policy.

"We jettisoned it with the belief that our members continue to be contributing past the age of 65," he said.

The firm's former system would take 10 percent of a member's equity away for a five-year period and then another 50 percent at age 70, which meant they were no longer a member, Ryan said.

"Sixty-five just seemed to be almost a random date selection," he said, calling the time frame an "unnecessary restraint."

The firm hasn't had any problems without a retirement policy and there hasn't been any talk of bringing one back, Ryan said. When Ryan, 48, transitioned into leadership, there were no problems with older members and the firm still has some of the same clients it did when it opened 50 years ago, he said.

Altman Weil's survey, conducted in September 2007, includes responses from 521 lawyers in management positions in U.S. law firms, including 28 percent from firms with 50 to 99 lawyers, 35 percent from firms with 100 to 249 lawyers, 17 percent from firms with 250 to 499 lawyers and 20 percent from firms with 500 or more lawyers.

The results show that lawyers in smaller law firms and women lawyers were less likely to support mandatory retirement.

In the firms where retirement was mandatory, 38 percent force retirement at age 65 and 36 percent say age 70. The smallest firms tend to use 70 as the retirement age, while most other firms look to 65.



Mega Brands awaits court ruling on toy test
Court Feed News | 2007/10/18 10:20

Canada's biggest toy maker said it was awaiting a court ruling on Wednesday about its fight against claims in a consumer advice magazine that one of its products contained elevated levels of lead.

Mega Brands is seeking an injunction in Quebec Superior Court to stop distribution of Protegez-Vous magazine, which the company claims used the wrong test on its plastic toy building blocks and published misleading results.

A ruling is expected at 2:15 p.m. on Wednesday, said Mega Brands spokesman Harold Chizick.

Protegez-Vous stood by the accuracy of its test results, several media reports said. A spokesperson for the magazine was not immediately available for comment.

Shares of Mega Brands sank to an all-time low of C$15.45 on the Toronto Stock Exchange, before reversing direction in early afternoon, to gain 5 Canadian cents to C$16.10.

Mega Brands said Protegez-Vous should not have used a total lead test on its molded plastic blocks, because that analyses paint or the coating on a product. It should have used a lead migration test, which the company called "the global standard" for uncoated plastic products.

"That's a test that simulates a child sucking on a plastic toy and how much lead will be transferred through the saliva," Chizick said.

The company wants to prevent the sale and further distribution of Protegez-Vous in advance of its scheduled newsstand distribution on Oct. 19. The French-language publication has already been mailed to subscribers, it said.

"While we respect and support Protegez-Vous' commitment to informing consumers about product safety, in this case, they made a very grave error," Mega Brands Chief Executive Marc Bertrand said in a statement.

There have been several high-profile recalls this year of toys made in China that contained excessive levels of lead in paint or involved small, easily ingested magnets.

Health Canada said on Wednesday preliminary results from its product safety lab indicate "no quantifiable total lead content" in the plastic. The toy was sampled from a retail location in Quebec late last week.

"Lead can be tested on objects in different ways and the results can vary greatly," said spokeswoman Joey Rathwell. "So we did our own testing, in the way that we test paint within hard plastic, and we found from our test that there was no lead in the product."

The company said the Canadian Toy Association has agreed the wrong test was used and that safety testing lab Bureau Veritas said the Canadian-made toy meets international safety standards.

Mega Brands is still recovering from an extensive, costly recall of some faulty Magnetix building sets. One child has died and 27 have suffered serious intestinal injuries after swallowing small, powerful magnets in the toys.



Pakistan court rejects Musharraf martial law fears
Legal World News | 2007/10/18 09:19
Pakistan's top court rejected concerns that President Pervez Musharraf would declare martial law if it rules his controversial election victory invalid.

The Supreme Court is hearing challenges against his landslide victory in the October 6 presidential election, which was boycotted by most of the opposition.

Musharraf, who seized power in a 1999 coup, cannot claim to have won re-election for another five-year term until the court decides. The general has not ruled out imposing martial law if the judgement goes against him.

"These threats have no value for us. This is an issue to be decided in accordance with the law and according to the merits," Javed Iqbal, the head judge hearing the challenges, told the court.

"The case will be decided in 10 to 12 days," he told the court.

The court started Wednesday hearing petitions against Musharraf's victory lodged by two candidates in the election who say Musharraf was ineligible to stand while he is still army chief.

The court had ruled earlier this month that the election could go ahead but the official result could not be announced until it resolved the challenges.

The general has vowed to step down as army chief and become a civilian ruler once his victory is declared official.



Defections lead to new law firm
Headline News | 2007/10/18 08:28

Three lawyers split from personal injury attorney William Mattar and formed their own practice.

Dean Smith, Joseph Bergen and Todd Schiffmacher broke from the Law Offices of William Mattar on Oct. 15 and opened Smith Bergen & Schiffmacher LLP the next day.

The office is located at 1207 Delaware Ave., Suite 219, in Buffalo.

Bergen said the three left because of differences in business practices including "increasing pressure on the attorneys to settle cases."

Mattar said the three "quit by their actions" and that their claims "are pure opinion and not substantiated."

Mattar said Bergen was employed there for several years while Smith and Schiffmacher were there for one year each.



Supreme Court Pursues Microsoft, Best Buy Case
Lawyer Blog News | 2007/10/17 16:42

The Supreme Court Monday rejected an appeal in the racketeering case against Microsoft and Best Buy that alleges consumers had MSN accounts activated and were charged for them without their knowledge when they purchased new PCs at the big box store. The two companies were trying to overturn the reinstatement of the 7-year-old case that was handed down in May 2007 by the 9th U.S. Circuit Court of Appeals in San Francisco.

In that ruling, the court reinstated the case, which accuses Microsoft and Best Buy of violating the Racketeer Influenced and Corrupt Organizations (RICO) Act.

The Supreme Court allowed the ruling to stand.

The two companies will now face a class-action lawsuit involving thousands of consumers and potentially hundreds of millions of dollars in damages.

Allegation of RICO violations are typically seen in cases of organized crime, such as the conviction of mobster John Gotti. RICO, however, is now being used in some civil cases and plaintiffs can be awarded triple the amount of their claimed damages.

In the Microsoft/Best Buy case, plaintiff James Odom complained that during the purchase of a new computer at Best Buy he was enrolled in a free-trial subscription to Microsoft's MSN Internet service without his knowledge and then his credit card was charged for the service once the trial period had expired. He says other customers paying with credit or debit cards also were enrolled in the same fashion.

The suit alleges wire fraud in the transferring of his financial data and, therefore, a violation of the RICO Act.

Odom charged the pair violated RICO in part due to an agreement under which Microsoft invested $200 million in Best Buy and agreed to promote Best Buy's online store through its MSN service. In return, Best Buy agreed to promote MSN service and other Microsoft products in its stores and advertising. The agreement, Odom alleged, led to the MSN enrollment issue.

We conclude that plaintiffs have alleged facts that, if proved, provide sufficient evidence that the various associates function as a continuing unit', the 9th Circuit Court wrote in its findings. The continuing ruling means the behavior by Microsoft and Best Buy was ongoing and not an isolated incident. The court also wrote that if the allegations are true that they establish that the pair shared a common purpose to increase MSN subscribers through fraudulent means.

In papers filed with the Supreme Court, the two companies said their joint marketing did not constitute an ongoing enterprise.

Microsoft officials told Bloomberg News in May after the 9th Circuit Court's decision that the ruling was procedural and did not reflect on the merits of the case. The MSN subscription program at Best Buy concluded in 2003 when Microsoft began to offer refunds to customers.



House Democrats split on Armenian 'genocide' bill
Lawyer Blog News | 2007/10/17 16:37

A House vote on whether to label as genocide the killings of 1.5 million Armenians by what is now Turkey -- a resolution that deeply offended that key U.S. ally -- could be delayed as Democrats hash it out. While top Bush administration officials and powerful Democrats press colleagues to scrap the measure, House Majority Leader Steny Hoyer on Tuesday appeared to hedge his pledge to bring it to a full vote before November's holiday recess.

"I said I thought we would bring this up prior to us leaving here," said Hoyer. "I have not changed on that, although I would be less than candid [not] to say that there are a number of people who are revisiting their own positions."

President Bush called on House leaders Wednesday to abandon the measure. "Congress has more important work to do than antagonizing a democratic ally in the Muslim world, especially one that's providing vital support for our military every day."

Bush also said at a Wednesday news conference that "... one thing Congress should not be doing is sorting out the historical record of the Ottoman Empire," the predecessor of modern Turkey.

By a 27-21 vote last week, the House Foreign Affairs Committee adopted the resolution, which formally identifies the killings as genocide. Turkish officials acknowledge the killings of Armenians during World War I but vehemently object to the designation "genocide."

The U.S. and Iraqi governments fear the proposed resolution could harm Washington's influence with Turkish officials who want to launch military raids against Kurdish rebels in northern Iraq. Washington officials are concerned the Turkish raids would further destabilize the region.



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