Saturday, October 6

How Many Years Does it Take for a Partner to be a Partner? The World May Never Know.

Earlier this week, Sidley Austin settled its lawsuit with the EEOC, pulling the plug on the burning-hot spotlight they've been under, but sadly offering no precedent on the plight of literally hundreds of other old, wealthy lawyers.

The EEOC investigation goes back to "Sidley & Austin's" 1999 "demotion" of 32 "partners" to counsel status, booting them from sharing in firm profits. The firm claimed it made the decisions based on performance (Profits per Partner are a key indicator of firm health surveys like the AmLaw 100), but the EEOC brought a claim alleging the move violated the ADEA, since most of the partners were in their 50s and 60s.

The fight between the agency and the law firm has garnered ridiculous amounts of attention in "Biglaw" circles, since a final judgment could either affirm the current corporate model used by most big firms or mandate a complete structural readjustment of billions of dollars in compensation. In the least, firms were eyeing their mandatory retirement policies with veins popping out of their sweaty foreheads.

With the settlement, nobody knows if partners are employees or if mandatory retirement is even legal - as with most settlements, both sides are using it to show how right they were all along.

For comments from both camps, click the jump.


Sidley agreed that the affected partners were employees subject to the ADEA only "[f]or the purposes of resolution of this matter." But the decree does not constitute a finding on the merits of the case. Nor does it require the firm to admit any wrongdoing. Sidley said on Friday the settlement was strictly a business decision. "The Firm believes that settling this case is preferable to the costs and uncertainties of continued litigation," Sidley said in a statement.

So, clearly the settlement could not set any type of precedent, right? It's not like Sidley made any explicit concessions or anything.

Mark H. Alcott, a partner at Paul, Weiss who called for the end of law firm mandatory retirement policies ...said the size and public nature of the Sidley settlement amounted to an "explicit concession."

Oh. Well, whatever. The mandatory retirement debate rages on - the ABA just weighed in against the policies in the latest ABA journal.

What we care about is the drama (and intellectual discourse regarding the definition of "employee", of course). This is, after all, the government toeing up against one of the biggest law firms in the land. But regardless of Sidley's high-profile status in the legal community, it's still an "employer" right? So what's so weird about the EEOC challenging an "employer"?

Well, for one thing, usually the agency waits until an employee asks them to get involved. Here, none of the "partners" ever contacted the EEOC (some of them even bowed out once it was clear the agency was looking for payroll records, according to the article). And usually "employees" and "partners" aren't exactly synomous terms.

But that's a story for another time. Stay tuned. We'll post about the 7th Circuit cases and the "employee"/"partner" fight real soon...