The “Great Resignation” and its Impact on the Legal Industry

Whether the “Great Resignation” will impact the legal industry ultimately may have to do with the alignment of what employees and employers separately want.

The “Great Resignation” — as it is being nicknamed by staffing experts — has already begun. In recent months the number of people who are leaving the workforce or switching jobs is climbing en masse.

More than 40% of workers around the world said they are considering quitting their job or changing their profession, according to research conducted by Microsoft. “We’re on the brink of a disruption as great as last year’s sudden shift to remote work: the move to hybrid work — a blended model where some employees return to the workplace and others continue to work from home,” the report stated.

What do employees and employers want?

Recruitment agencies on both sides of the table have outlined a situation around returning to the office that differs between employees and employers:

Employees see several key issues at the forefront of returning to the office, including:

  • As organisations slowly begin to ask their staff to return to the office, many employees aren’t willing to do so, at least not full-time, and not yet.
  • Employees say they want their life back and want to shift to “work to live” not “live to work.”
  • The average employee is seeking a hybrid work model, looking for people interaction (part-time), combined with the ability to work remotely.
  • Simultaneously, employees are feeling burnt out. The lack of work/life separation over the pandemic has caused more fatigue. They want policies about responding to emails late into the evening and weekends; and many are looking for pay increases or bonuses to reward them for their hard work. Often, they rationalise this because employers do not need a physical space for them full-time.

Employers, on the other hand, see the situation differently:

  • Employers can’t (or won’t) make large pay increases, because they anticipate extra technology expenditures for the hybrid work model; they can’t reduce office space immediately; and many organisations lost revenue during the pandemic.
  • Baby boomers who didn’t need to retire are choosing to finally do so because they don’t want to be bothered with the hassle of hybrid co-workers, plus, many worry about COVID-19 protocols in the workplace, such as non-vaccinated employees and clients, and other workplace concerns like the return of a 60- to 90-minute commute each way, and the sticky world of office politics making a comeback.

When most employers only invest in 2% to 4% of their total expenditures in training and development — and then often only at the executive level — it’s easy to see why their staff might feel under-appreciated.

“When employers invest in team and leadership development, they create more productive and profitable employees, not to mention tenure longevity,” says Jennifer van Amerom, CEO of Refine Management and VP of Revenue Operations for Vivo Team. “Happy employees are tougher to poach by the competition.” van Amerom, alongside her partners at Vivo Team, have always worked 100% remote. “During the pandemic we trained large management consulting firms on how to sell to their customers, train their staff, and work as a team, all remotely — largely in part because we are able to lead by example,” she explains.

Yet, that experience may be more the exception. The professional services industry has historically operated from a traditional workplace model — typically, all staff are in office, everyday, and many log overtime hours on a regular basis. That dynamic, van Amerom adds, may have to change.

“Work environments are constantly changing and need to continue to change,” she says. “It’s not a new request for employees to request work from home days, or employers to request all staff be in office to create company culture. What’s different this time is how team resilience is finally being put to the test.”

What’s changing in the legal industry?

Given the upheaval of the global pandemic and the reality of the Great Resignation, the level of change within the industry is huge, especially around areas like talent, work demand, and returning to the office.

Obviously, many U.S. law firms are desperate for good legal talent. Indeed, many firms have recruited north of the border, hiring Canadian lawyers into their firms. And many more firms are playing catch-up with the pandemic. Associate hiring decreased nearly 50% between 2019 and 2020, according to the NALP Foundation for Law Career Research & Education, based on its survey of 126 law firms. Fast-forward to 2021, and far from cutting back on hiring, many firms are now scrambling to attract and retain associates — as recent headlines on associate compensation have indicated.

Jane Aquilina, a legal search specialist for a boutique legal search firm says her firm is “extremely busy in this business climate” and is receiving job requisitions and targeted searches from law firms on a daily basis.

More change is surrounding returning to the office more than any other subject, of course, with vaccine requirements, masking, and social distance requirements being chewed over by many law firms. For example, Schiff Hardin pushed back its reopening date from September to November; and firms like Davis Polk, Reed Smith, and Fried Frank are requiring employees to be vaccinated. So much of this is in flux at the moment, that its difficult to discern where it’s all going to land at this point.

The professional services industry has historically operated from a traditional workplace model — that dynamic may have to change.

– Nancey Watson, President of NL Watson Consulting Inc.

On the work front, legal demand has remained strong and there has been increased activity in certain practice areas. There has been an increase in large litigation matters being put out to bid, and many law firms are now swamped with Request for Proposals (RFPs) of all sorts from clients, especially in areas security, employment & labor, real estate, and bankruptcy, according to several law firm proposal professionals.

Interestingly, there has also been an increase in panel firm RFPs — those requests for law firms to potentially join a client’s panel of most-often used firms. Bids requested in several practice areas are not uncommon, but the fact that panel firm bids are on the rise again could indicate that some law firms failed to provide clients with the needed strategic advice during the height of the pandemic.

Overall, it cannot be overstated how much the legal industry changed during the pandemic and will continue to change going forward, especially in how employees now view their relationship with work. As the Microsoft report noted: “We’re all learning as we go, but we know two things for sure: flexible work is here to stay, and the talent landscape has fundamentally shifted. Remote work has created new job opportunities for some, offered more family time, and provided options for whether or when to commute. But there are also challenges ahead.”

How law firms adapt to those challenges and how they accommodate employees will make all the difference in their performance during this post-pandemic phase.

Nancey’s article was originally published by the Thomson Reuters Institute, the Thomson Reuters thought leadership forum.

Nancey Watson is President of NL Watson Consulting Inc., and consults with in-house counsel on developing request for proposals (RFPs). She also works with law firms on proposal strategies and has helped professional services firms win more than $3 billion in competitive bids. She specialises in alternative fee arrangements (AFAs) and pricing for in-house and external legal counsel.

Nancey is well-informed in the area of legal procurement and is the author the book, “The Silver Bullet: How RFPs are Won”, which was published by The Ark Group. In addition, she facilitates the workshop “Strategic Proposal Management”.

She is a contributing author and has participated in podcasts for Thomson Reuters Institute in addition to speaking at a number of Thomson Reuters Institute events and forums. She is also a speaker at The Ark Group and Legal Marketing Association conferences. She also is an accredited presenter for Continuing Professional Education courses.

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