Out with the old as law firms face hard timesAs hard times hit the legal market, local law firms are encouraging their senior attorneys to retire earlier to make way for younger hires.
One of the perks for lawyers traditionally was that “there was no retirement age,” but with economic depression, law firms like Daeryook & Aju have set 63 as the retirement age, starting this year, while Yoon & Yang set it at 65 back in 2009.
Even Bae, Kim & Lee, a leading firm, cut its retirement age from 65 in 1980, when it was established, to 60 in 2009. Some law firms such as Shin & Kim, Yulchon and Barun Law set the retirement age at 65. Others like leading firms such as Kim & Chang, Lee & Ko have no regulations regarding retirement age.
But even large law firms are looking into setting caps on the age of their attorneys.
One attorney at a large law firm said, “As law firms grow larger and become more business-like, there is a trend towards adopting retirement age policies or lowering the age.”
Some law firms have even introduced salary peak ages to encourage retirement of attorneys past their prime. Another attorney shared that at their firm, once lawyers hit 55, they receive a 20 percent cut in pay each year until they reach 60 when they receive the same wage as an entry-level attorney.
“It’s a matter that is hushed up because the nature of the business is not to reveal income,” he said. “But once you reach 60, the wage becomes the same as a first-year attorney, so they’re pretty much encouraging you to leave the practice,” they said.
Still, compared to the average retirement age of 55 in local companies, attorneys get to work longer.
But the National Assembly in April passed a law to raise Korea’s retirement age to 60 as baby-boomers between 1955 and 1963 are struggling due to companies forcing them to retire years before their national pensions start paying out at the age of 60 or 61.
As other companies are scrambling for a higher retirement age, law firms are doing just the opposite.
The legal market, especially in the areas of real estate, finance and M&A, has decreased, but following the Korea-U.S. free trade agreement last year, an influx of foreign law firms have opened offices in Korea.
Furthermore, the new Western-style law school system in Korea, established in 2009 replacing the old bar exam system, produces as many as 1,500 fresh lawyers each year.
BY KIM KI-HWAN [firstname.lastname@example.org]
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