Devising a plan will lead to a happy retirement

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When it comes to retirement planning, Gary Bakke has some simple advice.

“Do as I say, not as I do. Plan!” deadpanned Bakke, a former shareholder at Bakke Norman in New Richmond.

“It would be an exaggeration to say I had a plan,” said Bakke, who spoke during the State Bar’s 2015 Solo and Small Firm Conference about his decision to gradually withdraw from legal practice. “The way I live my life, I wake up in the morning and see what’s going to happen. I’m not good at planning. I pretend to but I’m not, so it kind of grew.”

Scaling back came slowly for Bakke. It all started around 2000, when he became president-elect and then, later, president of the Wisconsin Bar Association.

From there, he gradually withdrew from practicing until, at the age of 65, he sold his interest in the firm. Today, at 76 and with more than 50 years in practice, he works essentially part-time, often as second chair on major litigation.

It’s an arrangement that’s good for him and for his firm. It’s also one that, Bakke acknowledged, allowed him to meander into retirement instead of hurtling headlong toward it.

Not all attorneys are so lucky.

“Things happen — illness, accidents, change of law, change of being welcome in your own firm. And people don’t do a very good job of planning for that unexpected, forced retirement,” Bakke said.

The importance of planning is something that Harvey Wendel has repeatedly stressed in retirement seminars organized by the State Bar of Wisconsin and the University of Wisconsin Law School.

“Sometimes it’s an accident. Sometimes it’s health reasons. But I would say the best advice is to not have to do it on an instant. Plan for it,” said Wendel, who is currently of counsel at Murphy Desmond in Madison.

Several sections of the state Supreme Court’s rules outline steps attorneys should take before retiring. From confidentiality and trust accounts to the responsibilities of partners and subordinate lawyers, even the sale of a practice, there are rules governing what attorneys can and must do before leaving the law.

“You have ethical responsibilities when you retire, and what’s important is going to depend on the circumstances of your retirement. But you can’t walk away without thinking about your ethical obligations,” Bakke said.

But, for many, deciding where to start planning for retirement really depends on how a lawyer is employed.

WANT MORE ON PLANNING FOR RETIREMENT? Read Ed Poll’s LawBiz Coaches Corner column

“For a sole practitioner, transitioning clients to a new attorney is the most important,” Bakke said. “If you’re in a firm, that is pretty much automatic because clients are clients of the firm, so it’s a smooth transition. But if you’re a sole practitioner — and this is especially true if your retirement is unplanned or sudden — very few solo practitioners have a plan in place for how clients should be handled, and that’s by far the biggest issue that happens to your client.”

Wendel agreed. “You can’t just say, ‘I’m closing my files.’ If you’re a solo, I’ve always said, ‘Find yourself another attorney or small firm and join them, or let them join you.”

That’s essentially what Wendel did in 1999, when his firm, Wendel Center, merged with Murphy Desmond.

After nearly 35 years in practice, Wendel decided a couple of years before the merger that he wanted to cut back. When the merger went through, he became of counsel and reduced his hours. At 76, he continues to work, but has emeritus status with the State Bar.

The long journey toward a career’s sunset is one that, Wendel said, often starts by asking other lawyers if they know of any new or established firms that are interested in acquiring existing cases. Some simply call a law school, whereas others take out an advertisement.

Wendel said that one might state, for instance, that “I am a 65-year-old attorney solo practitioner in Rhinelander. I’m retiring, and I’m looking for an attorney or a firm looking to merge my practice or take over my practice.”
Once the transition team is in place, the next step is getting in touch with clients.

And there are other considerations.

“I think some lawyers think that practices are valuable and can be sold for significant money, and that’s almost never true,” Bakke said. “You can’t sell your clients. And your desk and computer probably aren’t worth a lot, so thinking you are going to cash out of a practice, unless you have an income-continuation agreement with a firm, hardly ever works out.”

In fact, many solo attorneys continue to pay for the privilege of retirement.

“After you retire you still have a need for insurance,” Bakke said. “The insurance industry calls that a tail policy, and that obligation can continue as long as you can still be sued even though you’re retired, so you can’t stop insurance coverage without some risk.”