Additional menu

Pamela DeNeuve

Lawyer & Law Firm Peak Performance Strategist

Top 400 US Law Firms Lose $9.1 Billion Due To Turnover

posted on

Share
Tweet
Pin
0 Shares

Compare Costs of Top U.S. Law Firms with NFL

The top 400 law firms in the United States lose roughly $9.1 Billion collectively, because of using a broken, antiquated system to recruit, hire and retain their attorneys. To put the $9.1 Billion in perspective, the turnover cost for those 400 firms is more than double the annual salaries of all NFL players combined.

The most valuable asset of any law firm is their talent. It is crucial that the top 400 U.S. Law firms have the best lawyers on their team to maintain their capability, stature, and status. Without having needed expert talent, the law firm becomes broken.

A firm’s talent is the combination of leadership, qualifications, the prestige and the abilities of their attorneys. This talent is what their organization has to offer their clients. Top law firm’s talent is much like a NFL football team and it players. The success of the firm depends on upon the sum-total of the leaders and the team.

Breakdown Costs

A conclusion from a recent report indicates that the current strategies used by law firms for recruiting and development are “broken.”

The report states “the costs of attorney recruiting and attrition are taking an ever-increasing toll on each firm’s bottom line. The nation’s largest law firms spend billions of dollars each year to recruit, train, and ultimately lose lawyers from their ranks.” When an attorney leaves a firm, the cost to the firm ranges from $400,000 to more than $800,000 (for experienced attorneys). Turnover costs the legal industry roughly $9.1 billion annually in just the 400 largest firms in the United States.”

Monetary Costs

  • $250,000 Cost to recruit one 1st year associate

  • $400,000 Cost to firm when associate leaves

  • 17% annual attorney attrition rate for law firms

  • 46% entry-level associates leave law firm within 3 years

  • 81% entry-level associates leave law firm within 5 years

  • 43% lateral hires lose money

  • $25 Million annual cost   (1) (see link below)

  • Getting into Action

Victor sat back in his oversized chair, “Pamela when we calculated the total loss to our firm due to associate turnover, I could not afford to hire you to help us to fix it.”

I strongly recommend that each of the 400 top firms get the turnover figures from your HR department immediately so that you can accurately assess your losses.

Losing 15% to 20% of associates, not including partners who take with them their portable business, is not a good model. By making tweaks in the hiring, training, and developing stronger measures to retain lawyers will save each firm millions of dollars each year.

The old basis of hiring an associate based on the law school attended and GPA while seeking out partners over dinner and then recruiting them based on their portable book of business… on an average coupled with high recruiting and replacement costs create a staggering annual cost of more than $25 million for a 400-attorney firm.

Something must be done about this annual loss. Here is where you can begin.

Step 1: Ask HR to give you the number of associates that have left the firm over the past five years, (year by year) Begin calculating the firm’s annual loss due to associate turnover.

Step 2: Calculate the true costs attrition is costing your firm. Here is a couple of links to attrition calculators that might be helpful:

Attrition Cost Calculation – SlideSharehttp://bit.ly/1WKGtPH

What does Employee Turnover Cost You? https://bonus.ly/cost-of-employee-turnover-calculator These REAL costs will help you determine your TRUE costs of employee attrition.

Step 3: Hire an independent consultant/coach to help the firm reconfigure current policies for hiring, training. (Preferably non-traditional suit & tie consultants who will do more of the same)

Time for Change

Since the quality and capability of the attorneys is what the top 400 firms sell to clients, it is time to aggressively shore up all talent within the firm, decrease turnover and ultimately focus on increasing the ability to specialize in the numerous demands of current clients as well as potential business. Needless time, money and energy are now being wasted on turnover.

Although the legal industry has a long way to go, the firms that begin to hire and develop their talent better than their competitors will see their investments pay big dividends.

By changing the current paradigm and ending the cycle of high attrition rates, the top 400 law firms in the United States will save billions of dollars each year.

Pamela DeNeuve

Attorney Coach for Increased Profits

I help Law Firms Increase Profits By Retaining Their Associates

Email:  pameladeneuve@intrinsicsolutionsnow.com

Website:  www.intrinsicsolutionsnow.com

 

Links

Law Firms: The Cost of Hiring and Attrition (1) http://overflowlegalnetwork.com/law-firms-cost-hiring-attrition/

The Right Profile the Right Fit http://therightprofile.com/press-and-media/law-firms-could-learn-a-lot-from-the-nfl-draft/

The report is available here: http://therightprofile.com/law-firms/

Share
Tweet
Pin
0 Shares

Reader Interactions

Leave a Reply

Quotes from our Lawyer of the Week

  • I am here to protect the human rights and I will do the best in my capacity to do so.
    Diana Constantinidou
  • I love this work. I really do. To me, especially now more than ever, we need a strong news media. It’s not just a business. It’s part of our democracy.
    Edward Birk
  • You don’t have to be large and on the world stage to seize these opportunities and to apprehend these threats. It really is a function of the vision and the insight of the leaders. When they get it, then there’s an opportunity for them to persuade and help their partners get the message and act to remake themselves.
    George Beaton
  • I did not intend to create this legacy, but I see the ripple effects of it, and it’s so meaningful to me. I think that through the podcast, I’m also hoping to create a legacy of service to the profession.
    Okeoma Moronu
  • That’s one of the things that I find very satisfying; building bridges between people from different countries, working closely with them and seeking those deeply satisfying relationships that are created in cross-border trade and investment facilitation.
    John Grimley
  • I’m very lucky to have a family and a wife that absolutely just creates a life that’s there and that one can go to. I think about the stress that we experience in our work, that is the best we can offer. So I really live for that. It’s something to be grateful for.
    Nic Swart
  • The legacy that I want to leave in the work that I’m doing is having made a difference and having hopefully spearheaded some type of meaningful change in the culture of the legal profession, as it relates to addiction and mental health specifically.
    Patrick Krill
  • It’s not so much my practice that I want to make a difference in, but I want to know that I left the legal professional a little bit better than I found it.
    Courtney Wylie
  • the real reality is some of the lawyers, some of the law firms, are going to be left behind because they’re not moving into the current reality where they can’t just rely on referrals.
    Montina Portis
  • When you take a lawyer out of the system, you take the voice and the ability of the people to protect themselves from overreaching government and overreaching organizations out the equation.
    Ian Connor Bifferato
  • I think a lot of attorneys are very, obviously, economically driven, which is fine, because we all need to make a living. But, at the end of the day, I also think that we are in this profession to give back and I would like to see that happen to a greater degree.
    Dr. Jeanne-Mari Reteif
  • "I would like my clients to think of me as of being a valuable resource to them and a knowledgeable resource that helped them protect their business and the most valuable assets of their business, which is their inventions, their ideas, their brand and that they remember me as somebody they could go to at any time to help them protect their intellectual property assets.
    Crystal T. Broughan
  • The person I’m looking for is the one who is going to come along and say ok; we can’t just tweak what we do with law; we have to radically re-invent it.
    Ken Grady
  • So you have to be that person who is challenged again and again so that you will grow as an expert.
    Dr. Peter MacMillan
  • I always tell my clients and my friends and colleagues, it’s a two-way road. You know- you give, and you receive, you give back, and it keeps going that way. It’s wonderful.
    Fernanda Alem-Freitas
  • In terms of successes, I will tell you, having done this, I’ve gone much further and made more connections and more friends and more inroads into the industry much earlier in my career than I ever could have possibly imagined.
    Gene Quinn
  • my thinking was that I really need to understand what clients really wanted. So in order to really do a good job, I needed to find out what moves them, what kept them up at night.
    Silvia Hodges Silverstein
  • So when we talk about a legacy, it’s a legacy that people to this day tell me — oh, I remember working with your Grandfather and he was such an upright man. Wow, let’s hope they say that about me.
    Jordan W. Charness
  • this answer made me to become a lawyer instead of a mathematician.
    Anandavasagan K.
  • What I want to try to do is create the beacon, or the light toward, developing law firm culture, as in the legal profession culture in general...where they do find a sense of meaning, purpose, connection, joy and want to stay in the profession.
    Anne Brafford
  • it is my goal to try to increase diversity within our profession, and even for as long as I’m here, I will advocate for the inclusion of different perspectives, different peoples, and different ideas that can make this world a better place.
    Robert Johnson
  • I have learned a lot of things the hard way and if I can help others sort of avoid the mistakes I’ve made and have the vision I lacked, then that’s how I want to help
    Frank Ramos
  • "I’m sort of traditional with an edge. I have respect for tradition. I have respect for history, but I’m also very inquisitive. I like to, you know, sort of architect things.
    Mark A. Cohen
  • I am all or nothing. I believe that the world has enough mediocre people. I had a mentor tell me that once and I give 110% to everything I do.
    LaKeisha Randall
  • You’ll never know how high that peak can be unless you find recovery, and with recovery, anything is possible
    Brian Cuban
  • Being able to live and work anywhere in the world. And we do live, you know- we live in one of the most beautiful places in the world, in County Cork, Ireland now.
    Walt Hampton
  • You know, the best thing that anyone could possibly do is think about what’s important to them and get back to that really basic thing. Personally, professionally, financially. You know, where would you like to be? Because you can be there if you take a couple steps, you know? And it just- it can be incremental
    Bridget Venus Grimes
  • The people I represent have their own families and their own spouses and I see that vividly through my own experiences and trying to help them. I often try to, although perhaps not the easiest thing to do, but try to put myself into their shoes and approach a case with that regard.
    Mark A. Torres
  • My legacy really is to try to enhance the wellness of the members of our profession and to open up this dialog.
    Heidi K. Brown
  • At the end of my days, I want people to look back and say, "Yes, he really did make the world a better place and here are some concrete examples of places where he's influenced people, or influenced organizations, or cultures." So, if I can do that and leave that to the world, then I think I've done a pretty good job.
    Maurice L. Rabb
  • Pamela helped brought us a $12MM deal and was a key player to help finalize the negotiations. She was a valuable investment for our firm with a magnificent return on our investment.
    Bill L., Chairman of Litigation
  • I was on the verge of losing it. I felt confused and had no idea why I was practicing law in the first place. Pamela helped me to regain my enthusiasm and grow my practice enjoy my life again.
    Lewis M., Partner
  • I have worked as an in-house attorney for 20+ years with major corporations. I hired Pamela during a transition in my career. When I began working with Pamela, I needed clarity and direction as I forged a new path. Through Pamela's unique coaching techniques, I learned a tremendous amount about myself and what I wanted out of life. She helped me put plans in place, encouraged me and held me accountable for taking necessary actions. Coaching is clearly not just a business for Pamela. She truly cared about me and repeatedly went above and beyond to help me achieve the goals I set for myself. Pamela is highly knowledgeable and accomplished and I trust her judgment and coaching. I would highly recommend her to anyone who is looking to make a job or career change.
    Renee Cogdell Lewis
  • Why should only sports figures get coaches? I represent whistleblowers in highly complicated litigation cases. The work is stressful and I can't afford to be distracted or unfocused. Maybe some lawyer out there finds that easy, but if any lawyer/mom/wife does, I'd like to meet her. I needed to be at my peak ALL the time so I hired Pamela DeNeuve as my coach and -- wow! Hiring Pamela is like having someone right there with me in my practice as coach, mentor, confidant, and troubleshooter. I am on my A+ game thanks to Pamela.
    Lee Wallace
  • Pamela DeNeuve works with powerful men and women who look to the world like they have it all together. So that includes everyone who is successful because we all have skeletons in our closet. We all have an area of life that is painful or frustrating. While I looked like I had it all, a beautiful wife, a son who I have a great relationship and a long-time financial career, a growing business as a motivational speaker, something was missing. Something was off and I couldn't put my finger on it. Working with Pamela DeNeuve is one of the best things I have ever done. Her insight, her showing me the blind spots that I tried to ignore or avoid was an awakening. I have regained my enthusiasm again. I wake up with the wonder and excitement I had lost as the years wore on. I highly recommend Pamela DeNeuve's 8-hour intensive session. You will make quantum leaps in your career, increase your income and your wife will become the love of your life again.
    Tom Heitz
  • Any lawyer or law firm who want to expand their practice, increase client base, or re-ignite your love of the law will be wise to work with Pamela DeNeuve as your business/marketing coach. She has more than 25 years of experience working with AM100 law firms, small firms, and individual lawyers across the United States, in Asia, and South Africa. Pamela understands all aspects of the legal profession. She understands the challenges that we attorneys face. I retained Pamela to help with business development and some special projects in my First Amendment/Communications law practice. Almost immediately, I started to once again see opportunities in the challenges rather than the other way 'round. Practicing law is more enjoyable because of this work with Pamela. Asking for help is sometimes the hardest ask of all. After working with Pamela for her help, I'm glad I asked. I highly recommend her to any attorney or firm.
    Edward Birk