Law firms need to change their ageist ways
19 February 2007
Case law update: employment tribunal finds that setting a compulsory retirement age is not age discriminatory in certain circumstances
4 July 2013
1 July 2013
15 July 2013
19 December 2013
6 December 2013
Poor old Freshfields Bruckhaus Deringer. That is not an oft-heard remark, but along with the report of 100 equity partners being culled (The Lawyer, 5 February), the firm is facing publicity over an age discrimination claim brought by one of its partners.
It is one of the first claims against a law firm under the age discrimination legislation introduced in October 2006. As such, Freshfields could be excused for feeling slightly aggrieved that it is in the frame, especially when it is one of the few firms publicly taking steps to meet the challenge of the new rules.
Freshfields has removed the requirement for a date of birth on its job application forms and, more eye-catchingly, its graduate recruitment department has been renamed 'trainee solicitor recruitment' so as to limit any ageist connotations of the term 'graduate'. These are small steps, but at least they are steps.
Perhaps the surprise is not that the claim is being brought against Freshfields, or for that matter a City firm, but that it has taken four months to happen. Law firms are, after all, an obvious target for a legal challenge under the age discrimination legislation. Their culture is ageist from start to finish - from targeting traditional universities for trainee recruitment to the use of the dreaded acronym 'PQE' in adverts.
Age discrimination claims are also likely to be triggered by the involuntary termination of senior lawyers.
The scenario of a law firm needing to implement a 'reorganisation' (ie make redundancies) is common, and the lawyers in the frame tend to be senior assistants or salaried partners that are highly paid compared with most members of their department.
When they are selected for redundancy, the usual explanation is their relative high cost. But indirect age discrimination includes the use of selection criteria that, although applied to all employees, have the effect of disadvantaging people of a particular age, unless this is a proportionate means of achieving a legitimate aim. Here, the selection criterion would be cost. Would such a criterion be proportionate and legitimate?The Acas guidance for employers is clear: "Economic efficiency may be a real aim but saving money because discrimination is cheaper than non-discrimination is not legitimate." In these circumstances the senior lawyer made redundant because of cost has an extra argument in any claim.
Legal challenges are also likely to be focused not on challenges to lockstep (which is likely to be allowed at least for the foreseeable future), but in the mandatory retirement of partners.
Unlike the position of employees, there is no default retirement age for partners. A fixed mandatory retirement age is therefore potentially unlawful and discriminatory unless it can be justified. It is not easy to see how any firm can justify a uniform compulsory retirement age for all partners.
Firms that are seeking to retire partners face a real difficulty. It is easy to envisage claims being pursued by disgruntled retired partners. They are likely to have the resources to fund such claims and little disincentive - in terms of potential damage to reputation - not to pursue them in the public arena.
The culture of age discrimination will not change until public hearings take place and awards are made under the legislation.
The 'wait and see' approach of most law firms only work for a limited period. The question now is how long that limited period will be.