In the 2022 Law Firms Stay-Go Report, we see how some law firms are better able to retain their top legal talent while others are having a far more difficult time.
The competition for talent among law firms has been fierce over the last few months; and for most law firm leaders, it may feel as though every time they turn around, there’s a new top salary level they will have to match.
Deepening associate retention costs, the ongoing implementation of hybrid workplaces, increasing lawyer burnout and a renewed focus on work-life balance are just a few of the myriad talent-related challenges that law firms are confronting today.
To examine this environment more closely, the Thomson Reuters Institute and the Center on Ethics and the Legal Profession at Georgetown University Law Center have issued a new report, Law firms competing for talent in 2022: Will lawyers stay or will they go? that offers several strategies, practices, and areas of focus for those law firms looking to improve their prospects of successfully competing for quality legal talent in today’s market.
Citing data in the Thomson Reuters Institute’s 2022 Report on the State of the Legal Market that showed how some law firms were facing the dismal prospect of losing 125% of their associates over the next five years, the new report demonstrates how nearly every law firm has felt the increasing pinch of talent demands in some way. Yet, the report notes, some firms have fended off this talent siege more adroitly than others. But why? Why have some firms managed to hold lawyer attrition in check better than others?
The analysis contained in the report relies on a compendium of proprietary research conducted by the Thomson Reuters Institute to identify the attributes of law firms where attorneys are more likely to stay (Stay firms), compared to those that have experienced higher levels of attrition (Go firms).
While it may be a commonly held belief in the industry that compensation alone determines which lawyers will stay where, the report illustrates how lawyer compensation was just one aspect of strong Stay firms, with other factors being level of support from other professional fee earners, firm finances, and overall lawyer satisfaction with their jobs. For example, the report showed that those law firms designated Go firms saw levels of associate turnover in 2021 that were more than double the rate of Stay firms. Further, Stay firms saw steady and improving growth in their overall attorney headcount throughout 2021, while Go firms have struggled to return to even pre-pandemic headcount numbers.
The report also showed that associates, equity partners, and other professional fee earners at Stay firms produced and desired more billable hours than did their counterparts at Go firms, and that overall, lawyers at Stay firms expressed higher levels of satisfaction with their current firms in such key areas as being treated fairly, ability to be one’s self, firm management, reward and compensation, and opportunities for career and personal growth.
How likely are lawyers to leave?
As part of the report, law firm associates were surveyed more broadly to determine how at-risk they were to leave their current law firm and what factors might drive them to either leave or stay. Interestingly, associates ranked the people they worked with, their firm’s culture, the quality of work they did, and the availability and desirability of flexible working practices as higher favorability drivers toward their firm than their level of compensation. This may be a surprising finding to some, given the amount of attention paid to talent and compensation issues, and the near-default industry method of using compensation as a means of dealing with acquiring and retaining talent. Indeed, those associates who said they were less likely to leave their current law firm, ranked their firm culture, the people they work with, and work-life balance more highly than compensation as a reason to stay.
The report clearly demonstrates that lawyers at today’s law firms are looking for signals from their law firm management as to whether they should stay or go. And with competition for talent in the legal industry as fierce as it is, today’s lawyers can and will likely decide rather quickly whether remaining at a firm that offers a higher paycheck but little else will solve their longer-term concerns and address their long-term career aspirations.
Certainly, the consequences for those law firms that do not offer clear signals that demonstrate the firm’s willingness to make their lawyers’ concerns and aspirations of key importance is dire and potentially long-lasting.
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This article was originally published by the Thomson Reuters Institute, and has been published on Legal Insight with permission.