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Sidley Austin last week agreed to pay $27.5 million to settle an age discrimination suit brought by the Equal Employment Opportunity Commission after the prominent Chicago law firm forced out or downgraded 32 older partners without warning in 1999. As part of the consent decree — which sunsets on Dec. 31, 2009 — the firm is barred from requiring partners to retire at a certain age, a practice many major law firms have in place. Sidley Austin also established an independent monitor — Abner Mikva, a former White House counsel in the Clinton administration and former chief judge of the U.S. Court of Appeals for the D.C. Circuit — to field and investigate any future complaints about its retirement policies during the length of the consent decree. The decree was approved by Judge James Zagel on Oct. 4. As part of the settlement, Sidley Austin, which has about 1,700 lawyers, made no formal admission of wrongdoing. “This settlement puts the cost, time and distraction of this litigation behind us,” the law firm said in a press release. “Moreover, continuing litigation with the EEOC would have placed us in an adversarial position with former partners.” John Hendrickson, the EEOC’s regional attorney in Chicago, handled the case for the government. William Conlon, a partner at Sidley Austin, was lead counsel for the firm. The agreement brings an end to this storm — but the issue remains a legal hurricane, as firms reconsider mandatory retirement age policies and partnership agreements. Unlike corporate America, most large law firms have a mandatory retirement age (when lawyers either retire or de-equitize, forfeiting their financial stake in the firm) that is colliding with aging baby-boom-era partners, many of whom are healthy, vibrant, and wanting to work later in life. The EEOC’s suit, filed in the U.S. District Court in Chicago in 2005, charged that Sidley Austin discriminated based on age when it demoted or forced the retirement of 32 partners in 1999, before its merger with New York’s Brown & Wood two years later. Most of the class members were over 40 (triggering coverage under the federal Age Discrimination in Employment Act, or ADEA) and were allegedly downgraded because of their age. David Richards, now a partner in the New York office of McCarter & English, is one of the lawyers forced out by Sidley. He famously recalled in a newspaper interview being referred to as “deadwood” by lawyers at his old firm because of his age. He released a statement saying, “This settlement was overdue, but gives all involved a satisfactory conclusion. The members of the class have confirmation that their discharge was not for the quality of their work, the Commission has established an important legal principle for all large professional partnerships, and the law firm can move on.” But just how the legal world moves on is a looming question. That’s because Sidley Austin says in the decree that the firm “agrees that each person for whom EEOC has sought relief in this matter was an employee for the purposes of the ADEA.” The admission, however, did not come with a legal precedent. “This is an admission to the extent that if those were truly partners who were demoted, then the federal discrimination laws would not apply,” says Leslie Corwin, a New York employment partner at Greenberg Traurig who specializes in counseling law firm partnerships. “And it says that Sidley Austin was concerned enough to settle.” Corwin was not involved in the case. The EEOC had alleged that decision-making power at Sidley Austin rests with a few partners on a self-perpetuating executive committee, neutering the rest of the partnership and, in effect, demoting them to employees of the firm. That made Sidley Austin subject to federal civil rights actions by partners who claim discrimination. But some firms have taken hope that the extreme example of Sidley Austin’s management system will protect them from future lawsuits for similar practices. “This leaves unsettled what is the number one issue facing law firms today,” says Corwin of how firms will handle mandatory retirement. “There is still no definitive answer — we still have no guidelines.”
Nathan Carlile can be contacted at [email protected].

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