I really enjoyed Jordan Furlong’s post Time Bomb. If you haven’t had a chance to read it yet, please do. In this post, he summarizes The Economist’s special report on aging populations, A slow-burning fuse.
Lawyers are the commodity that we marketers package. Lawyers are the commodity they themselves sell. The lawyers bring in the money, and the lawyers spend the money.
Yet, according to The Economist, the aging population is going to tax not only the government, but the workforces as well. And law firms will not be exempt. I just wonder how many are preparing for it?
Jordan does a great job in laying out how he sees the aging population affecting the legal industry. I have taken the liberty of shortening each bullet point, so go read the full post for the details:
1. Get ready for the end of retirement, warns The Economist: “few governments, employers or individuals have yet come to terms with where retirement is heading: the end of the whole concept. Whether we like it or not, we are going back to the pre-Bismarckian world, where work had no formal stopping point.” …. Active lawyers in their 70s and 80s will become commonplace ….
2. Four generations in one firm will not be unusual ….
3. The massive partner incomes of today could well be considered relics of a bygone era, reminiscent of how we now think of railway barons’ fortunes. Partly, this will be because the revolution in the legal services marketplace will take billions of dollars away from law firms, as outsourced practitioners and sophisticated technology snap up formerly lucrative lower-end lawyer work. But it’s also because there will simply be far fewer working-age adults ….
4. Unfunded pension liabilities could crush some firms well before 2050. Those employees (staff as well as lawyers) who do eventually retire are going to live longer, and their numbers will multiply as the Boomers finally slide out of working life ….
5. Say goodbye to a lot of law schools. If the coming wave of legal education reform hasn’t already knocked many law schools out of the game, they can expect to be finished off by a simultaneous drop in both the supply of law students and the demand for new law graduates ….
So, what implications do you see the aging population having on law firms and the legal industry?
In the short term, I see great opportunities for the younger Boomers and Generation X as they move into more senior positions within the firms. There will be a void of intellectual capital that these people can fill, both internally in firm leadership positions, and as client service partners. However, firms that ignore and do not prepare for these changes will suffer internal frictions that could become insurmountable.