Law firms are not well enough prepared for the impact of the new age discrimination legislation, which came into force in October, according to a new survey.
Retirement age has been the biggest concern for firms, but few changes are being made to lockstep, recruitment and performance management following the introduction of the legislation.
Tina Williams, senior partner of employment and a partnership specialist at Fox Williams, which carried out the survey, said: “A lot of firms are taking the view that this is too mind-boggling to deal with. The main thing is that the law is going to have far-reaching consequences, both practical and cultural.”
Seven of the 25 top 100 law firms surveyed thought that the new age discrimination legislation meant that PQE was no longer an acceptable term to use for recruitment or salary bands. However, Fox Williams found firms were reluctant to make changes.
“PQE is likely to be reduced but not eliminated altogether, because long experience adds value,” one respondent said. Another partner said his firm would only abandon PQE “if the market changes”.
Fifteen out of 25 respondents said they thought age discrimination could be justified when setting a compulsory retirement age. One commented: “The only way to retain a healthy business is for partners to retire at a reasonable age so that young people want to join.”
But Williams warned that firms will not be able to justify having a retirement age that is less than the 65 mandated by legislation.
“The burden is really high for justifying any retirement age now,” she said. “The legislation overrides anything that’s in the partnership agreement.”
Williams said lockstep would also be hard to justify and that firms running a performance-based system would be more compliant with the legislation. Some firms, such as Eversheds, have already moved to a structure that puts the emphasis on merit rather than age.
Most firms believe that their current lockstep systems will survive the new legislation, with only one firm thinking that its system was unsustainable.
Lockstep periodsfixed Partner retirement ages