Mr. Personality and Why Attorneys Should Care About Their Client’s Retirement Plans

A few years back when I joined a semi-prestigious Long Island law firm, I had this silly notion that I could develop a single employer ERISA practice. Based on my contacts and with my ability to breakdown difficult topics in ERISA into English for advisors, accountants, and plan sponsors to understand, I thought I could do it. That and an ability to write, I thought it was a no brainer that I could bring in some business. One of the major components of developing this practice was try to cross-sell, selling my services as an ERISA attorney to the law firm’s existing clientele, which comprised of many Long Island companies. It was a can’t miss proposition

Well like great ideas like Crystal Pepsi and the Apple Newton, it missed. One of the bigger flops was trying to develop that cross selling. The partner in charge of the corporate department was a very unfriendly fellow who I affectionately now call Mr. Personality. Whether it was Mr. Personality or the three partners in his department, I felt there was a no understanding of what I was trying to do with the ERISA practice. My biggest belief is that my practice can help a plan sponsor cut down on their administrative cost, streamline plan administration, and minimize liability. For a corporate attorney or any attorney that has business clients or individuals who sponsor retirement plan, minimizing liability as a plan sponsor is a big deal. The reason I believe that it’s a big deal is because most plan sponsors are unaware of this potential liability. Those simple mistakes like not developing an investment policy statement (IPS) or reviewing mutual funds on a semi or annual basis are hidden liability pitfalls.  For example before I helped cleaned our plan up, we had no financial advisor, no IPS, no review of funds in 10 years, and no participant education. Perhaps for me, that should have been a clue.

In the 2 years and change I was at the firm and constant talks with the corporate partners, there was absolutely no traction or cross selling on my end. Mr. Personality did refer one matter to me. It was a review of a client’s new prototype plan document with a bundled provider. I reviewed the document and then I contacted Mr. Personality that the with the client’s plan topping at $4 million, it may be a good idea to moving that plan to an unbundled provider to save on administrative expenses, which could help minimize the client’s potential liability. 2 years later, I’m still waiting to hear back from Mr. Personality.

While plan sponsors, financial advisors, and accountants should know about the potential pitfalls of plan sponsor liability, I am amazed that many attorneys show little interest in their client’s retirement plans. It’s not malpractice on their part if they have not been retained in conjunction with their plans, but it’s a sign of neglect. Non-ERISA attorneys don’t have to be ERISA experts, but I think they should be aware of what retirement plans that their clients have and if there are any potential problems with them. They should always ask their clients whether their plan has undergone a review of their practices and plan documents to ensure that there are any lurking liability issues.

With my distaste of my old law firm’s corporate department (they had a knack for turning down business) and my hope to educate other attorneys about the hidden pitfalls of plan retirement sponsorship, I have been certified as a sponsor of continuing legal education course in New York and have an on-line course available in other states.  Educating other attorneys will ensure that there are less corporate attorneys like Mr. Personality who have no care that their client’s retirement plan could be an unmitigated disaster and huge liability pitfall.

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