Senior Lawyers
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June 2015 Vol. 6, No. 3 ILLINOIS STATE BAR ASSOCIATION Senior Lawyers The newsletter of the Illinois State Bar Association’s Senior Lawyers Section Chair’s column INSIDE By Barbara Slanker Chair’s column ........... 1 s the 2014-2015 bar year comes to an end, The Council is preparing an encore of the this is the last time I can speak to you from earlier presentation on computer basics. That Retirement from the Athe Chair. It has been an honor to be the program was so well received that there was a law practice .............. 1 Chair of the Section Council whose members are standing room only audience. The workshop Asset allocation .......... 2 dedicated to the needs and interests of senior also advanced mentoring, another Council goal, lawyers. by having younger attorneys mentor senior at- How and why you should I can look back at the Council’s accomplish- torneys in developing computer skills. join the Senior Lawyers ments in the past year and forward to its plans for The Council also has plans to present a pro- Discussion Group ......... 3 the coming year. During 2014-2015, the Council gram on the different aspects of making the focused attention on developing programs that transition from practice to retirement. Careful Book review— addressed senior lawyers’ special needs and in- planning can make the transition more efficient The Forgotten 500 ........ 5 terests. The activities included a workshop on and less painful. computer basics and a seminar on making a In departing, I wish the Council all the best for Medicare primer, part II ... 6 smooth transition from full time practice to re- the coming year. ■ tirement. Technology for seniors .... 8 Retirement from the law practice By Curtis R. Tobin II pon graduation from the University of other associates with a view toward expanding Illinois College of Law in 1965, I became the practice and structuring a succession plan. Uassociated with a senior practitioner who All of our associates were great people and had a general practice with a heavy emphasis we maintain a good relationship with them to on probate and real estate work. The office was this day. However, all of them left the practice located in Belvidere, Illinois, the county seat of after a short time to pursue other interests. One Boone County. went into law-enforcement, one became a col- Over the next 49 years, our office make up lege professor, and my son, who had become a and practice group expanded into other areas of partner, ran successfully for Circuit Judge in 2010. If you're getting law, but always maintained the heavy emphasis So much for the succession plan! this newsletter on estate planning, estate administration and Then I began to look seriously at succession real estate. planning, as I wished to cut back my time and en- by postal mail The law practice was a busy one, taking from ergy from the full-time practice of law. and would 50 to 60 hours a week. We also raised a family I found that the so-called “part-time” practice prefer electronic and participated in a number of community or- really did not work very well for me. ganizations, not unlike many other practitioners. Cutting back hours in the office or taking ad- delivery, just Seven years into my practice, I began an asso- ditional vacations in this age of phones, faxes send an e-mail to ciation with a new partner that was an excellent and e-mail doesn’t allow one to get very far away Ann Boucher at one and lasted 42 years. Continued on page 2 During our partnership, we hired a number of [email protected] Senior Lawyers | June 2015, Vol. 6, No. 3 Retirement from the law practice Continued from page 1 from the client problems or the office. whom I had a valued professional relation- We also agreed to follow the professional In a small firm, clients typically go to law- ship. responsibility standards with regard to client yers and not to the firm, and in my situation The agreement has to be fair to both par- notification. that made retirement even more difficult. ties, but must allow the firm to reasonably Five months into retirement, I can report Over five decades, my clients and their fami- grow and compensate its attorneys. that I am exceedingly happy with the deci- lies became good friends. I wasn’t replace- Valuing goodwill is the most difficult, par- sion. I have much more time with my wife, able; it was just “inconvenient.” ticularly in a small practice where clients tend children, grandchildren and friends, as well My partner and I hired John Olmstead to go to individual lawyers and not the law as for community activities. of Olmstead & Associates (who has worked firm. I do get into the office every couple of with the Bar Association extensively) and Valuation models such as average net in- weeks to consult with a law firm partner and we examined, with his counsel, a number of come over the last five years times 1.5 were a longtime client. concepts and possibilities for our then two- discussed, but all seemed too high for the Otherwise, I find my days are filled with person firm. law firm to manage. family activities, friends and community and Among the options was the possibility Ultimately, the buyout agreement val- charitable organizations. of adding additional attorneys with areas of ued the buyout at a percentage of accounts I have tried not to get into any long-term expertise that the firm did not have, together receivable and work in process on the firm’s non-legal projects for the first six months. I with decreasing practice time that existing books as of the date of my retirement. am sure my wife and I will identify some proj- partners would be required to devote to the This payment is to be made on a monthly ects as we go along. business. basis, with the entire balance, if not sooner I was extremely fortunate to practice law We looked extensively at the possibility paid, payable in five years. at a time when law was practiced “in the of mergers with larger firms, even engaged I also agreed as “of counsel” not to practice grand manner,” and when lawyers respected in substantial negotiations, but nothing law unless requested as a consultant by the each other as practicing attorneys and judg- seemed to be a good fit. firm. I have an hourly stipend if the firm so es on the bench. Ultimately, we hired another young law- requests. I am excited for the next portion of my life yer with great experience and credentials, The firm agreed to continue to pay mal- when I hope I can continue to give back to with a view toward that lawyer becoming a practice insurance, bar association and con- the community, and continue to pursue cur- full partner in one year, upon my planned re- tinuing education costs on my behalf. rent and new activities with wife, family and tirement date. We also agreed that the firm could con- community. ■ Next came the difficulty of negotiating an tinue to use my name as long as it met pro- agreement with my long time partner with fessional responsibility standards. Asset allocation By John J. Horeled, Esq. key to successful investing is an ap- John Bogle, who oversaw the tremendous years. Therefore, an investor should keep as- propriate asset allocation. Upon re- growth of the Vanguard Index Funds. His sets equal to three years’ expenses in short Atirement, a proper asset allocation is formula is that you should own your age in term bonds and the balance in equities. even more important. bonds, i.e. if you are 65 years old, you should The second approach is advocated by Wil- There are some standard formulas and I own 65% in bonds and 35% in equities. liam Bernstein, who believes that you should will review three of them. The third formula is a variation of the take the money off the table. The number The first is the classical standard endow- age-based allocation, which is promoted needed to spend in your retirement should ment formula, which is 60% in equities and by Charles Schwab. His formula is that you be placed in safe short term investments 40% in bonds. It was hoped that an average should own bonds at your age less 20%, i.e. if with the balance in other investments. This return of 10% could be achieved with an you are 65 years old, you should own 45% in protects you from a bear market early in re- annual payout of 5%. Current endowment bonds and 55% in equities. tirement. See Money Magazine, September investing is more sophisticated and, in any There are also three alternative methods 2012. event, a 5% payout may be too aggressive. that I would like to present. The final approach states that the old This percentage strategy can be simply du- The first one is what I call the Davis The- well-known formulas are wrong and that al- plicated by purchasing the Vanguard Bal- ory, which is promoted by Shelby Davis of locations should take into account a severe anced Index Fund. the Davis Funds family. He believes that most market correction early in retirement that The second formula was developed by negative market cycles last at most three will be hard to recover from. Michael Kites 2 June 2015, Vol. 6, No. 3 | Senior Lawyers believes that your equity portion should be point.