Partnerships and the new age discrimination laws
Commonly partnership and LLP (limited liability partnership) agreements provide for partners’ retirement ages.
Ages between 55-65 are stated to allow the “young blood” to come through.
However this is set to become more complex following the age discrimination that comes into force on 1 October 2006 as the default retirement age of 65 does not apply to partners or members of LLPs.
As such firms will not be able to specify a retirement age for partners and the alternative of forcing out a partner at a certain age could lead to lengthy and expensive legal proceedings.
After 1 October partners can continue to work after 65 if they so choose or are able.
For many partnerships this will be problematic. Younger aspiring partners may leave frustrated at the lack of career opportunities. Demanding clients may be less sympathetic as age and illness perhaps takes its toll on energy levels and performance-though of course health and energy issues are very individual and you may yourself know a very sprightly septuagenarian who enjoys good health and is never absent from the office.
The way forward therefore has to be objective-not based on ageist prejudice-and to this end performance reviews and agreements and a pay structure to match has to be the legal response to this conundrum.
Review of the partner appraisal scheme therefore becomes imperative with realistic but challenging objectives and targets being set and agreed relating to: client retention, development, revenue, reputation, staff mentoring and so forth.
With an objective basis “slackers” can be taken to task fairly.
