Two recent cases on either side of the Atlantic point to one of the most crucial issues currently facing law firms: coping with the pressures caused by an aging partnership. In the United Kingdom, Magic Circle firm Freshfields Bruckhaus Deringer finally emerged victorious on Wednesday in its long-running dispute with former partner Peter Bloxham over the reform of the firm’s pension scheme. Meanwhile, in the United States, Sidley Austin last Friday agreed to pay $27.5 million to 32 former partners who were demoted to counsel in 1999 when all were in their 50s and 60s. There are clear distinctions between the cases, but they point to the demographic time bomb ticking at most English and American firms.

The Freshfields case has attracted the interest of both the legal and national press in the United Kingdom because it was the first to be brought under new age discrimination laws that came into force in October 2006. Under the pension restructuring that Freshfields instituted last year, Bloxham, then a year short of retirement at a full payout, saw his annuity reduced by 20 percent, from $458,000 to around $356,000. The Central London employment tribunal ruled that the pension plan restructuring was discriminatory, but that it was also a proportionate means of achieving a legitimate aim and therefore legal. Freshfields had argued that it needed to undertake the reform because the firm’s younger partners were faced with the prospect of shouldering the pensions of a growing pool of retired partners. Bloxham’s lawyers said in a statement released hours after the result was announced that they were reviewing the implications and the options open to Bloxham. They have 42 days to lodge an appeal.

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