Arbitration as a Pension Plan

There are countless legends about the salaries of lawyers. In almost every country lawyers belong to the middle class, often to the upper-middle class, and sometimes even to the high class. High salaries translate themselves into a high standard of life. Even in poor Communist Poland, lawyers made a pretty good living. I once heard a discussion of experienced lawyers at a court corridor in Poznan, my hometown. All of them were complaining that times were hard, that the clients were ungrateful, did not pay the bills, etc. When they left, the old court bailiff, who was listening in silence, just shook his head disapprovingly and said: “They’re always complaining, but when was the last time you saw a lawyer without a good car?” 

At that time, a car or a color TV in Poland was a sure sign of wealth. However, access to material goods is not unlimited in time. The good times may come to an end one day. Great lawyers practicing in the U.S., France, England or in Sweden will have high pensions. Their standard of life should by no means deteriorate after retirement. Meanwhile, lawyers in Central and Eastern Europe have far worse prospects. The market economy in that part of Europe is still relatively young. The social security system has only just started to function normally. My generation began paying social security contributions late in life. Not all sole practitioners pay the highest contributions. And even if they do, how much money will the social security system accumulate for him? Is it profitable to pay maximum contributions or is it better to save and invest on one’s own? A demographic timebomb is fast approaching – some say a demographic depression too – and it might be increasingly difficult for tomorrow’s young to maintain the baby boomers of the early 50s. Even the best-retired partner of a big law firm in Central or Eastern Europe may wind up at 65 receiving an official pension of just a few hundred Euros. And the further east you go in Europe, the smaller the pensions are.

Thus, the career of an arbitrator is the best alternative pension plan for a lawyer. After all, when retired, there is nothing better than continuing what you can do and what you like doing, at your own pace, among friends and acquaintances, in attractive locations abroad and for an attractive honorary. I think that retirement did not change much in the life of many arbitrators.