NEW YORK, April 17 (Reuters) - The New York State Bar Association is urging law firms to end mandatory retirement policies in light of a recent settlement between Kelley Drye & Warren and the Equal Employment Opportunity Commission in an age discrimination case.

NYSBA President Vincent Doyle said in a statement that he was "heartened" by last week's settlement requiring Kelley Drye to abandon a policy that the EEOC said forced partners who reached the age of 70 to relinquish ownership in the firm and reduced their pay to a discretionary bonus.

"Arbitrarily requiring a senior attorney to retire or assume a lesser status in a law firm solely because of age is not an acceptable policy," Doyle said.

Kelley Drye voluntarily dropped its mandatory retirement policy after a partner at the firm, Eugene D'Ablemont, filed suit in 2010, claiming violations of federal age discrimination law.

The April 10 settlement, which was filed in the U.S. District Court for the Southern District of New York, requires the firm to pay D'Ablemont about $574,000 in back pay and a percentage of fees for his services. It also obligates all partners to attend a two-hour training session on age discrimination law.

Kelley Drye managing partner James Kirk declined to comment on the NYBSA statement.

The issue of mandatory retirement policies at firms sparked a lawsuit in 2005 against Sidley Austin brought by the EEOC on behalf of 32 former equity partners claiming age discrimination. The law firm, which denied wrongdoing, settled the case in 2007 for $27.5 million.

The same year, the American Bar Association passed a resolution recommending that firms do away with mandatory retirement policies.

"The retirement policies of law firms should be governed by flexibility and consideration of the needs of the firm and the individual partner," Doyle said in Monday's statement.

(Reporting by Leigh Jones)

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