During the excitement before the Super Bowl where fans wager large sums of money. This year the intriguing battle of wits between the two opposing quarterbacks, Peyton, and Newton, who will both make the major calls for their teams, the Broncos, and the Panthers. Millions of football fans are enthusiastically awaiting the game pitting these two quarterbacks, the older and legendary five-time MVP Peyton Manning against younger upcoming star Cam Newton.

The Losing Wager

Just like in the Super Bowl, law firms also make wagers. However, these legal corporations anticipate a loss because the high attrition of Associates is just part of the game. Kevin scratched his head, “Pamela we just can’t retain our best Associates. The question is always, which Associates will stay and which will go. How many will stay and how many will leave.”

The gamble and investment law firms make for each attorney is like a slow hemorrhage that costs law firms millions of dollars. The PAR Research Institute has documented the enormous expense of “churn and burn” attrition of talented lawyers: losing a single Associate costs a law firm between $200,000 and $500,000. In another study considering hard and soft costs, the cost of human capital, namely Associate turnover costs the firm $300,000 per lost Associate.

A Partner at the law firm is like the quarterback on a football team. The Partner makes all of the decisions for the team. However, like the quarterbacks Peyton Manning or Cam Newton, Partners cannot win the game alone. Both the Partner and quarterback are only as good as the sum-total of the team.

Up to 20% of Associates leave the firm each year. Using the football analogy, say for example Manning begins the game with 10 others on the football field, but as the game progresses 20% or two team members walk off of the field. He would lose the game. While law firms can still scuffle around and win their cases, let’s consider the costs to the firm.

A 400-attorney firm easily loses an average of $12,000,000 per year because of associate attrition. This figure reflects a conservative number of 15% of associates leaving per year. More than likely, many large firms lose as many as 20% of their Associates annually which increases the loss by more than $500,000.

What Can Be Done?

Linda said, “Pamela it is insane how much time, energy and money we invest in our Associates yet so many leave each year. We try to ignore it, but it becomes very discouraging and taxing on our practice group.”

Smaller firms, who invest considerable training, are losing their Associates which causes massive losses, eating up profits, which they cannot afford.

Paul said, “Pamela I can’t afford to stay in business because I can’t keep training new Associates and Paralegals. The cost is too high.”
I initially spoke with both Paul, who had a small firm and Linda, a Partner at a large national firm, during a free Strategy Session that I offer each week (see below for details).  Both Paul and Linda received value from our discussions revealing solutions to their dilemma.

Looking At Old Patterns

NFL teams treat their quarterbacks like gold. They are clearly the most valued players in the game, due to their responsibilities and direct impact on the outcome. However, the NFL also invests millions of dollars keeping the other team members, and backup players happy.

Likewise, Partners, especially those with portable business are treated like gold because they contribute to the bottom line. However, many Associates feel like they are a just a commodity to put in the billable hours. The loss of attorneys has been a chronic problem in the legal profession for decades. Savvy law firms are renewing their commitment to retain their Associates.

The old outdated mindset of, “Losing Associates is the cost of doing business,” is being trounced in favor of using innovative methods to fortify the troops within the firm.

 

What Does Really Attrition Mean?

The term attrition means wearing down, wearing away, weakening, debilitation, enfeebling, sapping, attenuation or gradual loss. Although the workload is heavy, Associates must not be worn down. Small changes to encourage and build up the troops can make an enormous difference.

Ian, an Associate, confided to me, “If I just felt like I mattered. I know it might sound silly but after struggling and working hard to graduate from law school and pass the bar, I don’t want to be treated like cattle.”

Questions to Ask

Here are questions every law firm wants to ask themselves:

  1. How much does it cost to ignore the problem of associates leaving the firm each year?
  2. Is my firm willing to invest $1MM to save $12MM in programs and coaching services for associates to increase morale?
  3. Is my firm willing to do things differently in order to retain Associates?
  4. Is it time to re-train Section Heads, Supervisors and Chairs of groups to do things differently?
  5. Is the firm willing to transform from the top down, saving the firm $12,000,000?

Time to Face the Facts

The seriousness and magnitude of this problem is not going away. Associate attrition is increasing, and more lawyers are seeking other professions to avoid the “churn and burn” syndrome of being an Associate.

What are the Costs?

  • Recruitment fees
  • Training and development costs.
  • Administrative and resource costs.
  • Shortage of manpower
  • Associate-billable and non-billable hours lost
  • Costs associated with replacement
  • Lost hours of Partners and Supervisors required for training
  • Loss of morale can cause other Associates to leave
  • Time spent interviewing and screening
  • Lost productivity of other lawyers.
  • Lost engagement from other employees who see high turnover tend to disengage and lose productivity.
  • Newly hired lawyers take longer and are often less adept at solving problems.
  • Cultural impact Whenever someone leaves others to take the time to ask themselves “why should I stay?”

The Old School Method of Blame and Move On

The old-school mindset of saying for example, “Victor wasn’t up to the standards of our firm.” Or “Sally loved her family and time off more than she loved our firm.” “Or our firm separates the boys from the men and the women from the girls.” These mindsets cost your law corporation, millions of dollars.

These outdated methods to achieve productivity among the troops are counterproductive and only exacerbates the problem. Why are these high levels of attrition of such concern to law firms? As most law firms are well aware, the financial and non-financial costs resulting from Associate losses are staggering and growing. I care about this problem, and that is why each week I offer free Strategy Sessions to discuss solutions.

One firm had an extraordinary loss of Associates due to the firm culture that the Associates were considered “underlings.” The Managing Partner was from the “pull yourself up by your bootstraps” generation. The headhunters were circling the firm knowing that after working with this organization for six months, their Associates were fair game.

Once my client began to follow my strategies to develop and enroll the into an ideal bigger than the billable hour, their attorneys became invested and more loyal to the firm. The cost in time and money was minimal when compared to losing millions of dollars each year.

Working from the Top Down

By seeking innovative and nontraditional ways to mitigate these problems, firms are experiencing phenomenal results. The days of the high-priced, suit-and-tie consultants with cookie-cutter formulas have quickly become passé.

Programs must be instituted that begins from the top down. The new innovative mindsets realize that the work can be done, the firm can be profitable and still retain Associates.

The Question

As we approach the Super Bowl, it is time for law firms to decide whether they are going to throw in the towel and just roll over accept the status quo, losing millions of dollars each year due to attrition or, take some nontraditional leaps to increase retention among their ranks.

The NFL has been known to take seemingly frivolous, non-macho measures by having football players take dance, Yoga, Pilates (some NFL players have actually been in my Pilates class!) and meditation. For macho football players, these may seem like drastic means to achieve flexibility, concentration and agility among these rough and tough players. By stepping into these nontraditional methods, the wins have been proof that success comes from trying something new.

It is time for law firms to step up to nontraditional ways to break the pattern that has caused firms lose millions of dollars each and every year.

About Pamela:

Pamela Helps Law Firms & Attorneys with Retention and Engagement

Revive Your Law Practice 

★ Defeat: Stress, Anxiety, Depression  Addictions ★ (20 years exper)

I’d love to chat with you for a few minutes to discuss solutions

 I set aside time each week to speak with lawyers

One free Strategy /Coaching Session

Schedule directly on my calendar:  https://calendly.com/pdeneuve

or send a special request

Email: pamela@boldandbravelegalladies.com

Links:
So Associates Are Dissatisfied? It’s Not Hard to See Why
http://apps.americanbar.org/lpm/lpt/articles/mgt08063.shtml

What Is An Associate Worth? – How to Identify Value and Grow The Earning Capabilities of Your Attorneys  http://www.lawbiz.com/article-what-is-an-associate-worth.php#sthash.T9CwNRyh.dpuf  http://www.lawbiz.com/article-what-is-an-associate-worth.php

So Associates Are Dissatisfied? It’s Not Hard to See Why http://apps.americanbar.org/lpm/lpt/articles/mgt08063.shtml

The cost of Losing Associates  http://www.idaabbott.com/resources/cost-losing-associates