Mandatory Retirement Policy Sends Skadden's First Female M&A Partner To Mayer Brown

The thorny question of mandatory retirement policies.

Martha McGarry packed up her business and moved over to Mayer Brown this week. But this wasn’t just another move in a red hot corporate market. McGarry had to relocate in order to keep her practice going.

Skadden, like many Biglaw firms, has a mandatory retirement policy at 70. With McGarry facing an involuntary end to her career, she found that she just couldn’t leave her clients and struck out to find a new home.

From Bloomberg Law:

McGarry has been a prolific M&A lawyer for decades and said in an interview with Bloomberg Law she wants to maintain that practice. She has spearheaded deals for American Express Co., The Coca-Cola Co., and The Hershey Co., among other household names. She said she wanted to continue working with her clients, which she will do as co-leader of Mayer Brown’s M&A practice.

“They are part of the daily fabric of my life,” McGarry said of her clients. “And the more I contemplated that all ending, I just decided: No. My energy level is incredibly high. There are lots of things that would be fun to be a part of and to accomplish, and I don’t want to stop.”

A lot of firms have mandatory retirement policies, but should they?

On the one hand, the human mortality rate remains locked at 100 percent, so firms must always plan with an eye to the future. Mandatory retirement sets a predictable timetable for partners to port business to younger attorneys to keep the firm’s revenue stream locked in. It’s also a valuable tool for retaining that young talent that may move themselves if they don’t see a clear path forward. Up and coming attorneys don’t just miracle themselves Coca-Cola as a client, they depend on rising in seniority on deal teams, generating trust, and eventually earning the baton as senior partners retire.

But none of that helps if the retirement policy encourages partners to take their books across the street. Who cares about securing long-term business when it costs the firm those clients entirely? Despite that mortality rate, lifespans are getting longer and a 70-year-old partner today is a lot friskier than a 70-year-old partner from 1985. On balance, senior attorneys likely have years (if not decades) more in the tank these days than partners of yesteryear when firms settled on this number out of a hat.

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Unfortunately, that’s also an overarching problem with the whole economy. Boomers refusing to get out of the workforce has created mass stagnation. While late stage capitalism forces older Americans to keep working well past the benchmark for retirement just to stay afloat, one presumes M&A partners with revenue numbers in the tens of millions wouldn’t be hurting to step aside.

And not for nothing, but generally speaking, partners at firms with mandatory retirement ages benefitted from those policies when they were younger when they collected business from their own mentors. To some extent, if a partner takes the front end benefit of the policy, they should give it back on the other side.

Though maybe that’s just outdated thinking! There may have been a day when clients stuck with firms through multiple generational handoffs, but that’s not how most in-house counsel operate today. If a partner they trust steps down, the next lawyer up at the firm may get a crack at the business, but the client is likely to open it all up to see what’s out there. In a world where business isn’t a rubberstamp transfer, succession planning is less important than keeping the attorney with the established relationship front and center and generating revenue.

So do firms waste potentially lucrative years from senior partners at the peak of their careers or waste (and potentially lose) younger talent waiting around for an opportunity to grow into a long-term business generator? Difficult question.

That’s probably why the divide on this question is roughly 50-50.

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Skadden’s First Female M&A Partner Says No to Forced Retirement [Bloomberg Law]


HeadshotJoe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.