As the managing partner of a top Los Angeles law firm, Norman H. Levine is no stranger to what might be called the Posada problem.

Nothing, he said, is as tough as telling fellow partners that their best days are behind them. “I’ve always joked that I wish I could have these conversations by phone,” Levine said. “If someone wants to stay and you don’t want them to, that’s the hardest. It’s like going to your parents and telling them they can’t handle their affairs anymore.”

If anyone doubts the sensitivity of the task, consider the case of Jorge Posada, the once-formidable New York Yankee who at the ripe old age of 39 found himself demoted to the starting line-up, unable to consistently do the one thing a designated hitter does - hit. When he got the news this month, he walked into manager Joe Girardi’s office an hour before the game was to start and announced he wasn’t going to play.

Few professionals in other fields have that option — Posada’s contract guarantees him $13.1 million this year, despite a batting average of .183, the lowest among designated hitters in Major League Baseball. But the painful encounter between coach and lagging star — Posada apologised the next day — is one that is taking place with increasing frequency in the wood-panelled offices in law firms, banks and other elite professions, industry insiders say.

“All the rules have changed,” said a long-time New York executive recruiter, Richard Stein of Caldwell Partners. “In a market that’s become extremely lean and mean, these individuals who have tended to be the senior statesmen of their day are sometimes the first to go.”

It can happen at any age, of course, but it’s an especially delicate issue in an era when many workers stay on after they turn 66, when they qualify for full social security benefits.

Even as old notions of professional courtesy and obligation erode, so too has the quiet acceptance of traditional, mandatory retirement ages. Twice in recent years the Equal Employment Opportunity Commission has sued top law firms, accusing them of discriminating against older partners, and a closely watched case now under way could make it even harder for firms to dislodge ageing lions.

As roughly 44 million baby boomers hit retirement age over the next decade, the problem of how and when to step aside is becoming a hot-button issue, said Robert J. Gordon, a professor of economics at Northwestern University. Some jobs will always have age restrictions - police officers, fire fighters, surgeons and the like. And in corporate America, mandatory retirement ages for senior management face less resistance, thanks in part to generous incentives to leave early that are perfectly legal. But chief executives still have a habit of hanging on, said Jeffrey A. Sonnenfeld, a professor at the Yale School of Management.

The monarchs stamp out rivals and remain on the throne until they die or are forced out, while the ambassadors become senior statesmen, attending the economic forum at Davos, Switzerland, and similar affairs. Generals leave under pressure and spend their days plotting a Napoleonic return to power. Finally, there are the governors, who go on to do something else, like philanthropy or public service.

On Wall Street, firms like Goldman don’t have a mandatory retirement age, but there are other ways of easing people out, like “de-partnering,” when partners are quietly dropped from the top ranks.

It is an especially tough issue in the legal profession. There is no mandatory retirement age for federal judges — one remains on the bench at 103 — and solo practitioners often work into their 70s and 80s. Senior partners at big law firms, on the other hand, frequently feel the heat much sooner.

While Levine, the law partner from Los Angeles, always breaks the news in person, sometimes the message isn’t even delivered face-to-face. One New York real estate lawyer learned by letter that he was to lose his equity share in the partnership where he had worked for nearly 20 years but had the option of staying on with a salary cut of 10 per cent. His limited contract would have to be renewed by the firm every 18 months.

Edward Poll, a Los Angeles consultant who works with law firms believes the best way to stave off that situation is to maintain deep relationships with clients. “Very few people are so skilled that they can’t be replaced by a younger, more current practitioner,” he said. “You’ve got to be so connected to important clients that the firm is going to fear your departure.”

In the meantime, like Posada, whose not-so-subtle hint came when Girardi dropped him to No. 9 in the lineup, from No. 2 - older partners find themselves on the lookout for signals like a cut in the annual bonus. The message is loud and clear — if it’s not, they’ll stick around because there’s nowhere to go.”