Most law firms simply cannot afford to continue paying partners beyond their working lives. And there is no reason a partner in a law firm cannot accumulate a significant funded retirement plan through a combination of the various available qualified plan vehicles. There are few destitute partners retiring from law firms anymore.
More important, the logical underpinnings for unfunded plans have largely evaporated in most firms. There is clearly no need for the plans to provide retirement income, although older partners in firms with such plans often consider them in their own planning (often encouraging productive partners to retire earlier than the firm would prefer.) Likewise, there is no systematic or convincing anecdotal evidence to suggest that such plans provide “golden handcuffs” that keep important lawyers in their firms. Although relatively fewer senior lawyers—i.e., those closer to retirement—move than younger lawyers, this is clearly the case in firms without plans, as well as in those with them.
On the other hand, there is substantial evidence indicating that valuable lawyers move away from firms with such plans to avoid funding retirement benefits for partners to whom they feel no obligation. Finally, there is little evidence that such plans, even ones specifically tied to client retention, increase the likelihood of client retention. This rather important goal is best facilitated through appropriate planning and compensation approaches during the partner’s last years before retirement, rather than afterward.
While there are few positive reasons for maintaining the plans in most firms, there are enough problems created by them to suggest that cutting them back or eliminating them would improve the long-term outlook for the firm. First, plans are a drag on the economic performance of the firm. If the firm is at the top of its market in terms of economic performance, it may be able to handle some level of unfunded retirement benefits. However, for most firms, the effect of the plan is to reduce the income paid to the partner to below his or her market value, which contributes to the attrition of valuable partners, usually in the prime growth period of their careers. To see how modern firms are replacing unfunded schemes with secure 401(k) and profit-sharing plans, refer to our updated partner retirement & profit-sharing guide.
For insights into funded retirement benefits for law firm partners, see Law Firm Partner Benefits & Retirement: 401k, Profit Sharing & Tax Implications 2024.
Second, significant unfunded obligations can create serious differences in the personal interests of the partners, often along generational lines. Such conflicts can rise to the level of a serious problem in some firms.
Finally, unfunded retirement plans can be a problem in lateral recruiting and are often a serious issue in law firm mergers.
With little foundation and significant potential problems, it is clear that for most law firms, unfunded retirement plans are a problematic anachronism. This has generated a clear trend toward “doing something about” unfunded plans in many firms. But, assuming a firm has a problem, what can be done? Understanding the practical value of partner benefits is essential — our guide Law Firm Partner Benefits & Retirement explains how retirement and profit-sharing plans are structured and taxed in 2025‑2026.
Ending Unfunded Retirement Plans
Once the firm decides to do something, there are a number of approaches available to eliminate the problem associated with the unfunded retirement plan. Perhaps the most obvious approach is to simply fund the plan; however, this is not as easy as it looks.
During the early to mid-1980’s, a number of law firms attempted to fund their retirement obligations, generally through life insurance vehicles. Not surprisingly, this rarely, if ever, worked. Today, funding approaches are available that offer at least the prospect of successfully funding the plans, assuming the stock market cooperates. However, these approaches have not been well established, nor do they have a significant track record of success.
Of course, there is a real cost of funding the plan. Significantly, changes in the tax rules have created opportunities for firms in a position to invest beyond the traditional limits of qualified savings vehicles to create supplemental benefit programs on a tax-and creditor-advantaged basis. So, those firms who wish to do more advance funding may be better off simply abandoning their plans in favor of additional qualified retirement plan benefits.
A much more common approach to dealing with problematic retirement plans is to eliminate them in some orderly fashion. There are three basic approaches to eliminating unfunded retirement plans. These include:
- “Cold Turkey” Elimination of the Plan. This is the least common approach in practice; however, a few firms have succeeded in simply voting out the benefit for all partners, effective immediately. For obvious reasons, this requires either favorable internal political circumstances or strong leadership, or both. It also helps if the partnership is relatively young at the time when the decision is made.
- Phase-outs. Many firms have phased out their retirement plans. The most common approach to this involves those closest to retirement receiving the largest share of their expected retirement benefits, with those farther away receiving less. At some stage, say age 50 and below, partners would no longer receive these benefits. This approach works, but often has the effect of keeping a residual plan around for a long time, which may create some internal problems and will not quickly help in the context of merger.
- Buy-outs. A number of firms have been able to buy out their retirement obligations by devoting a share of the firms’ current incomes for a limited number of years to satisfying the obligations for future benefits. While this has some political challenges and increases the costs in the short term, it is often the most effective way to quickly deal with a substantial obligation.
Preretirement Partner Compensation: What Makes Sense?
Many unfunded retirement plans pay retired partners a portion of the revenue received from “their” clients after retirement, on the theory that this would encourage them to try to keep the client with the firm. But there is little evidence that firms with such retirement plans have better retention of clients after the partner’s retirement than those firms without them. Learn how to protect your future earnings in The Ultimate Guide to Retirement Plans for Lawyers.
Far more important to the retention of clients after a partner’s retirement is his or her actions and efforts in the time leading up to retirement. Simply put, those partners who make significant efforts to institutionalize (or at least transfer) during the three to five years prior to retirement are more likely to keep their clients with the firm than those who do not. However, most firms pay little attention, formal or otherwise, to the partners’ efforts to plan for retirement. In fact, many actively discourage partners from transitioning clients by keeping the partners subject to a retirement approach that forces them to maintain client “control” and continue to bill significant hours.
A better approach for both the partner and the firm is to begin focusing on the partner’s desire to slow down and retire several years before his actual target date. Typically, it will take three to five years to fully transition a significant legal practice. Therefore, at least a few years before the partner’s intended retirement (or the firm’s mandatory retirement age), the firm and the partner should agree on a plan for transition.
During this time, the firm should focus on different agreed criteria, rather than the firm’s normal compensation criteria, in setting compensation. In large part, the partner should be compensated to work toward transitioning his client base while still continuing to bill a reasonable, but lower, number of hours and continuing to find new clients. During this period, the partner should never be marketing alone and should be rewarded for his or her efforts to introduce and incorporate other lawyers into the client relationship. Properly done, the firm will have paid him or her to transition his or her client base in advance of retirement.
There are, of course, other approaches to accommodating lawyers who want to slow down but still contribute to the marketing and practice of the firm. Many firms craft “of counsel” positions to accommodate the specific needs of the individual and the firm. If the position is properly constructed, there is no reason why a mutually beneficial arrangement cannot be maintained as long as the partner wants and is capable of remaining productive.
Economic issues surrounding the retirement of partners are frequently troubling to law firms, and are generally made worse by their reluctance to address the issues in a timely manner. Nevertheless, with careful management and aggressive leadership, there is no reason that partners’ retirements cannot be a vehicle for strengthening the firm.
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How to Hire a Legal Recruiter for Your Law Firm: How Law Firms Recruit Attorneys Using Legal Recruiters |
About Harrison Barnes
No legal recruiter in the United States has placed more attorneys at top law firms across every practice area than Harrison Barnes. His unmatched expertise, industry connections, and proven placement strategies have made him the most influential legal career advisor for attorneys seeking success in Big Law, elite boutiques, mid-sized firms, small firms, firms in the largest and smallest markets, and in over 350 separate practice areas.
A Reach Unlike Any Other Legal Recruiter
Most legal recruiters focus only on placing attorneys in large markets or specific practice areas, but Harrison places attorneys at all levels, in all practice areas, and in all locations-from the most prestigious firms in New York, Los Angeles, and Washington, D.C., to small and mid-sized firms in rural markets. Every week, he successfully places attorneys not only in high-demand practice areas like corporate and litigation but also in niche and less commonly recruited areas such as:
- Immigration Law
- Workers Compensation
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- Family Law
- Trust and Estate
- Municipal law
- And many more...
This breadth of placements is unheard of in the legal recruiting industry and is a testament to his extraordinary ability to connect attorneys with the right firms, regardless of market size or practice area.
Proven Success at All Levels
With over 25 years of experience, Harrison has successfully placed attorneys at over 1,000 law firms, including:
- Top Am Law 100 firms such including Sullivan and Cromwell, and almost every AmLaw 100 and AmLaw 200 law firm.
- Elite boutique firms with specialized practices
- Mid-sized firms looking to expand their practice areas
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He has also placed hundreds of law firm partners and has worked on firm and practice area mergers, helping law firms strategically grow their teams.
Unmatched Commitment to Attorney Success - The Story of BCG Attorney Search
Harrison Barnes is not just the most effective legal recruiter in the country, he is also the founder of BCG Attorney Search, a recruiting powerhouse that has helped thousands of attorneys transform their careers. His vision for BCG goes beyond just job placement; it is built on a mission to provide attorneys with opportunities they would never have access to otherwise. Unlike traditional recruiting firms, BCG Attorney Search operates as a career partner, not just a placement service. The firm's unparalleled resources, including a team of over 150 employees, enable it to offer customized job searches, direct outreach to firms, and market intelligence that no other legal recruiting service provides. Attorneys working with Harrison and BCG gain access to hidden opportunities, real-time insights on firm hiring trends, and guidance from a team that truly understands the legal market. You can read more about how BCG Attorney Search revolutionizes legal recruiting here: The Story of BCG Attorney Search and What We Do for You.
The Most Trusted Career Advisor for Attorneys
Harrison's legal career insights are the most widely followed in the profession.
- His articles on BCG Search alone are read by over 150,000 attorneys per month, making his guidance the most sought-after in the legal field. Read his latest insights here.
- He has conducted hundreds of hours of career development webinars, available here: Harrison Barnes Webinar Replays.
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Submit Your Resume to Work with Harrison Barnes
If you are serious about advancing your legal career and want access to the most sought-after law firm opportunities, Harrison Barnes is the most powerful recruiter to have on your side.
Submit your resume today to start working with him: Submit Resume Here
With an unmatched track record of success, a vast team of over 150 dedicated employees, and a reach into every market and practice area, Harrison Barnes is the recruiter who makes career transformations happen and has the talent and resources behind him to make this happen.
A Relentless Commitment to Attorney Success
Unlike most recruiters who work with only a narrow subset of attorneys, Harrison Barnes works with lawyers at all stages of their careers, from junior associates to senior partners, in every practice area imaginable. His placements are not limited to only those with "elite" credentials-he has helped thousands of attorneys, including those who thought it was impossible to move firms, find their next great opportunity.
Harrison's work is backed by a team of over 150 professionals who work around the clock to uncover hidden job opportunities at law firms across the country. His team:
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This level of dedicated support is unmatched in the legal recruiting industry.
A Legal Recruiter Who Changes Lives
Harrison believes that every attorney-no matter their background, law school, or previous experience-has the potential to find success in the right law firm environment. Many attorneys come to him feeling stuck in their careers, underpaid, or unsure of their next steps. Through his unique ability to identify the right opportunities, he helps attorneys transform their careers in ways they never thought possible.
He has worked with:
- Attorneys making below-market salaries who went on to double or triple their earnings at new firms.
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For attorneys who think their options are limited, Harrison Barnes has proven time and time again that opportunities exist-often in places they never expected.
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If you want to explore new career opportunities, Harrison Barnes and BCG Attorney Search are your best resources. Whether you are looking for a BigLaw position, a boutique firm, or a move to a better work environment, Harrison's expertise will help you take control of your future.
Submit Your Resume Here to get started with Harrison Barnes today.
Harrison's reach, experience, and proven results make him the best legal recruiter in the industry. Don't settle for an average recruiter-work with the one who has changed the careers of thousands of attorneys and can do the same for you.
About BCG Attorney Search
BCG Attorney Search matches attorneys and law firms with unparalleled expertise and drive, while achieving results. Known globally for its success in locating and placing attorneys in law firms of all sizes, BCG Attorney Search has placed thousands of attorneys in law firms in thousands of different law firms around the country. Unlike other legal placement firms, BCG Attorney Search brings massive resources of over 150 employees to its placement efforts locating positions and opportunities its competitors simply cannot. Every legal recruiter at BCG Attorney Search is a former successful attorney who attended a top law school, worked in top law firms and brought massive drive and commitment to their work. BCG Attorney Search legal recruiters take your legal career seriously and understand attorneys. For more information, please visit www.BCGSearch.com.
Harrison Barnes does a weekly free webinar with live Q&A for attorneys and law students each Wednesday at 10:00 am PST. You can attend anonymously and ask questions about your career, this article, or any other legal career-related topics. You can sign up for the weekly webinar here: Register on Zoom
Harrison also does a weekly free webinar with live Q&A for law firms, companies, and others who hire attorneys each Wednesday at 10:00 am PST. You can sign up for the weekly webinar here: Register on Zoom
You can browse a list of past webinars here: Webinar Replays
You can also listen to Harrison Barnes Podcasts here: Attorney Career Advice Podcasts
You can also read Harrison Barnes' articles and books here: Harrison's Perspectives
Harrison Barnes is the legal profession's mentor and may be the only person in your legal career who will tell you why you are not reaching your full potential and what you really need to do to grow as an attorney--regardless of how much it hurts. If you prefer truth to stagnation, growth to comfort, and actionable ideas instead of fluffy concepts, you and Harrison will get along just fine. If, however, you want to stay where you are, talk about your past successes, and feel comfortable, Harrison is not for you.
Truly great mentors are like parents, doctors, therapists, spiritual figures, and others because in order to help you they need to expose you to pain and expose your weaknesses. But suppose you act on the advice and pain created by a mentor. In that case, you will become better: a better attorney, better employees, a better boss, know where you are going, and appreciate where you have been--you will hopefully also become a happier and better person. As you learn from Harrison, he hopes he will become your mentor.
To read more career and life advice articles visit Harrison's personal blog.
