Legal experts claim that many agencies would have almost no defence against lawsuits brought against them as a result of the Government's upcoming legislation outlawing age discrimination in employment.
The IPA is currently collecting views from member shops and will present them to the Department of Trade and Industry. The DTI is carrying out a consultation process in advance of new laws due to come into force by 2006.
In a message to members, the industry trade body said: "Given the age profile of the industry, this is likely to have a fairly major impact."
The industry is already facing criticism that it is losing touch with an ageing population. Of the 14,000 people working in IPA member agencies, fewer than half are under 30 and fewer than 20 per cent are over 40.
Now lawyers believe UK agencies will be vulnerable to the kind of claims for unlimited damages already common in the US.
James Davies, the joint head of employment and incentives at the law firm Lewis Silkin, said agencies' lack of a proper system of appraisals and warnings would make it relatively easy for staff sacked in their 40s or 50s to argue that age was a factor.
Mary Budd, the IPA's employment affairs adviser, warned that agency graduate recruitment programmes could be affected if the legislation prevented employers imposing age limits on jobs.
"This will force a major culture shift in the industry," she added. "It will no longer be safe to assume that anybody over 40 is past it."
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