Current events have highlighted yet another wrinkle in the equity partnership issue. According to the AmLaw Daily, BigLaw firm Kelley Drye & Warren announced on April 8, 2010 that it had relented in the face of an Equal Employment Opportunity Commission suit by amending its partnership structure to permit equity partners to retain their equity partnership past the age of 70 (check out the article here ).
The article explained the firm's partnership cutoff structure prior to the change:
Under the system in place prior to the partnership agreement being amended, Kelley Drye required partners to relinquish their equity interest at 70. At that point, they became "life partners" who received annual payments; those, like [the complainant who prompted the EEOC investigation and subsequent suit], who continued to practice could also receive a bonus.
The EEOC complaint alleged age discrimination in the practice's effect of paying less to lawyers over the age of 70 for the same work.
This is an interesting case for a few reasons. For one, discrimination suits against firms tend to be really tough to win; this one was on the books in black and white, so it had a leg up over alleged discrimination on the basis of race or gender. It's a strange case in that the disparately treated class had been in a position of power-the ultimate position of power in a BigLaw firm, in fact. People went from an equity partner with a vote to something more akin to a non-equity partner or of-counsel in the course of a single day (their seventieth birthday). One would think that, in their own self-interest, equity partners nearing the age of 70 would disfavor the policy. And the lawyers being shunted off on the non-equity track are generally moving from a position of little power to another position of little power, not from one of ultimate power to one of irrelevancy.
It's also interesting to note that lawyers over 70 aren't being given a free pass-they must keep working and successfully carrying the equity partnership load. The old policy was presumably promulgated to avoid having senile, decreasingly effective partners. Under Kelley Drye's new policy, partners over 70 will now be "judged solely on their performance," according to the article. And of course, this makes good business sense. The fact that the firm adhered to an arbitrary cutoff rather than performance metrics really undercuts any firm claims of business acumen, and begs a question as to what other arbitrary, non-performance-based decisions firm administrations might be making.