Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m J U N E 2 0 1 5 27 M BY JENNIFER BROWN awyer Norm Keith is 58 and laughs hard when asked about his readiness for retire- ment. "There's an old adage that most good lawyers live well, work hard, and die poor," he says, referencing the quote from American lawyer and statesman, Daniel Webster. "Many probably spend a little more money than they need to, for appear- ances sake, or life enjoyment or because they're not thinking and planning ahead. As a partner in a law firm you probably think you should be living better than you are and for some that means going into debt," says Keith. For many lawyers in their mid-to-late career, he says, the inability to even con- sider retirement is very real these days as the profession gets squeezed by a number of competing forces generally acting negatively on their financial statements. And there are stark indicators the need for smart and early retirement planning is greater than ever before. The word on Bay Street is big firms are pushing partners out, in some cases in their late 40s and 50s in order to thin the ranks and make room for less expensive, younger lawyers. "It's a bleak prospect for the profession, bleak indeed," says Keith, an employment and criminal defence partner at Fasken Martineau DuMoulin LLP in Toronto who plans to continue working indefinitely. He admits various factors over the years have made the prospect of retiring anytime soon pretty slim. "I think generally lawyers, once they're past 15 or 20 years of practice, are like most professionals and start thinking about retirement. Unlike accountants and more organized people though, they don't do a good job of planning for it," says Keith. "I think by the time you realize you should have been saving, I'm not going to say it's too late, but it makes it more difficult." Even the best-laid retirement plans can give way to chaos when a major life event takes place, such as divorce or job loss. As well, over the last five years, market forces have not always been kind to investment portfolios. The fact clients are pressuring lawyers to deliver lower cost services hasn't helped either. "We tend to be very busy ourselves and tend to look after our clients' interests better than our own. It's also a high-risk profession for marriage failure. Typically, unless you have married another lawyer or a wealthy spouse it tends to be a reversal of fortune experience when you have a marriage breakdown," says Keith. "The third reason is incomes have been stagnant or even in some cases declining for lawyers, even for partners in law firms." From a financial adviser's point of view, Izhak Goldhaber says lawyers are typically pretty savvy about the need to save money. "In general lawyers are a higher income earning class and have been putting aside good sums of money, but the big issue is one of quantum — am I going to have enough? And many are discover- ing they are not going to have enough," adds Goldhaber, a former adviser and vice president, insurance and financial services, with the Canadian Bar Insurance Association and CBA Financial Services Corp. Goldhaber agrees with Keith that life events like divorce can affect financial outcomes over time, even when someone makes a good living. "When you talk about the impact of divorce alone — I can't overstate how devastating that is emotionally, but also financially. Imagine you've been on track with a retirement and financial plan and then all of a sudden it all blows up because half your assets are gone," he says. While many may not have much sympathy for lawyers who haven't had the foresight to plan for retirement, it's pretty clear they have become somewhat of a high-risk group. With law firm profitability on the decline over the past six to eight years, some partners are working harder than ever but not necessarily making more money — in some cases less — which detracts from their ability to save and plan when costs remain the same. "In this economy who is ready to retire at 55 to 60 years old?" asks Malcolm MacKillop, of Shields O'Donnell MacKillop LLP. "Lawyers aren't any worse than any other profession, the difference today is the attitude about the FINANCIAL PLANNING ISN'T A STRONG SKILLSET FOR LAWYERS, BUT IT DOESN'T HAVE TO BE THAT WAY. TAKE ACTION NOW TO AVOID END-OF-CAREER PANIC. KYLE REED

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