Retiring Law Partner’s Checklist
Congratulations, Counselor, you’ve decided to retire! After a long and distinguished career, it’s time to ride off into the sunset and start enjoying life after the law. So, as a parting gift, we’ve put together this short checklist of things you should do as you prepare for your retirement and separation from your firm. I want to give a nod to one of our great longtime attorney clients who helped us put together some of the points on this list as well.
1. Firm-Sponsored Retirement Plans
- Will you be able to leave your retirement plan assets in your current employer-sponsored plans, or will you be required to roll them over to your IRA?
- If your firm has a Cash Balance Pension or any other type of Pension plan, ask for an updated balance for your pro-rata share of the plan.
- Confirm what your contributions to your plans will be for your last year at the firm and when those contributions will end.
2. Partner’s Capital Account
- Ask for the current value of your partner’s capital account and confirm the timing and structure with which your capital will be returned to you.
3. Post-Retirement Income Plans
- If your firm has any type of post-retirement income plan that will pay you for a certain number of years post-retirement, get clarity on the structure and estimated values of those payments.
- For example, some firms have plans that will pay a retiring partner a certain percentage of their last few years’ average compensation for a set number of years. If your firm has a plan like that, you should confirm what those payments will be based on and the timing/structure with which you will receive them.
4. Partnership Agreement Review
- Notice to Partnership of Your Retirement – Make sure you understand what type of notice (usually in months or years) that you are required to provide to your firm of your plan to retire.
- Rights to Pending Settlements / Cases – What are your rights to large pending settlements or contingency cases? Make sure you understand how these rights will affect your future income depending on how the cases you have worked on pan out.
- Early Retirement Benefits / Payouts – Are you entitled to any benefits for leaving the firm early and working to transition client relationships to your partners or other attorneys at the firm?
- Health Insurance
- Will your firm allow you to continue to be part of the firm’s healthcare plan, even if you pay the premiums out of your own pocket?
- Some firms allow this, which is a great feature… if not, you may want to explore COBRA and then eventually private insurance once COBRA runs out.
- Malpractice Insurance
- Will you continue to be covered by your firm’s insurance for some period of time, and if not, should you secure coverage on your own?
- Life Insurance
- You very likely have life insurance policies that are tied to your employment at the firm. You need to understand who pays those premiums, who the beneficiaries are, and whether you can continue those policies on your own if you need that life insurance as part of your financial plan.
So, as you can see, there are several things to consider as your retirement from the firm draws near. In addition to spending the needed time to transition your client relationships effectively, make sure you’ve got these bases covered as well.
Justin works closely with clients to design wealth management plans that take into account the full spectrum of their career and personal concerns with a specialization in advising law firm partners. Justin earned his MBA from Northwestern University’s J.L. Kellogg School of Business.