Clients often ask me, “Roy, what’s the biggest mistake solo practitioners and small firm owners make when considering their retirement/succession strategies?”
My answer? Attorneys permit their office situation, specifically a lease obligation, to muck things up.
When family and friends ask why you have chosen this very moment to retire, do you really want your answer to be, “Well, my lease was up”?
I sure hope my answer is a more thoughtful one, more along the lines of:
- I was starting to lose the fire in my belly.
- I want to spend more time doing ____.
- I need to care for ____.
- I finally reached my number and can afford it.
- It’s time to start checking things off my bucket list.
The Downsides of Following Your Lease
When your lease expiration date drives your retirement date, you may face one or two not-so-desirable outcomes. First, you may retire prematurely. If the most compelling reason to stop practicing law is that your lease is up, perhaps the time may not be right for retirement. Alternatively, when you sincerely want to retire and your lease still has a ways to go, you may find yourself practicing longer than you desire.
The Right Time for Retirement? Easier Said Than Done
Deciding the right time for retirement, however, can be problematic. Let’s say you are 67, in good health and know that you’re not ready to retire. But you aren’t completely sure when you will be ready, and your lease is expiring. Now what? Do you sign on for five more years and keep your fingers crossed?
There is no simple answer. But flexibility is the key.
One option is to try to negotiate a lease term for less time. Sure, you may have to pay more per month. Or you may have to move to find a shorter term. But, think about it. This is a small price to pay in comparison to facing one of the following two scenarios while stuck in a long-term lease:
- Your or your spouse’s health takes a sudden serious turn for the worse, requiring you to slow down or completely retire. Not a likely occurrence in your 40s or 50s, but a realistic possibility during your 60s and definitely in your 70s.
- The unanticipated occurs. For example, you lose a major client, a key staff member moves on, the economy moves in a direction that threatens your practice area, or new legislation or a court ruling adversely impacts your practice area. In the past, your practice may have easily rebounded. But such turnarounds are usually measured in years, not months. Do you really want to expend all of that effort, just to retire as soon as you start reaping the rewards?
Put Those Lawyering Skills to Work
At the end of the day, deciding what to do about a lease when you are approaching retirement age is no more or no less than a calculated risk assessment — something lawyers are presumably well trained to do.
Make sure that you calculate your risk. If you don’t, your landlord may be the one determining when you retire, not you.
Related: How to Be Successful at Succession Planning
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