So many managing partners readily confess that they have no documentation about how or when a partner should retire.
Others tell me that they have two or three (or more) partners who have “retired,” meaning they have relinquished their ownership but they continue to work as they always have and still collect a paycheck while being paid their “retirement” dollars. There is no policy that limits their involvement in serving clients.
As a managing partner, address the issues this year and work with your partners in making the commitment to a defined process.
An important aspect is to clearly define what an owner’s responsibility is to develop people that will be able to replace them, in case of emergency and when retirement occurs.
Define the obvious other issues:
- At what age, must a partner retire (relinquish their ownership)?
- When must a partner notify the firm of retirement? Two years out, three?
- Is there a penalty for lack of notice?
- Document the process for the transition of clients, step-by-step.
- What is the pay-out and what is the period of time for the payout?
There are many more important topics/questions your group will need to discuss and identify.
Be sure to assign responsibility for actually drafting the Partner Retirement Process. It doesn’t have to be the managing partner.
If you need assistance, contact me.