A Managing Partner Speaks
Albert, a Managing Partner of a mid-sized firm, weighs in on attrition, “There is a lot of talk about how hard law firms work their associates. It is almost as if firms have become villains. These statements are just not true. Law firms are businesses, not country clubs!”
He stops, takes a couple of important calls and asks me to step outside of his office for a moment.
Albert comes to the door and waves me in, “I just had to take those calls.” Albert says apologetically. “It’s my job, along with the Executive Committee, to keep the lights on, show a profit and take care of my clients. Now there is constant talk that we work our associates too hard.”
80% of Attorneys Leave Within 5 Years
Albert is referring to the fact that The National Association for Law Placement (NALP) recently released statistics indicating that almost 80 percent of attorneys at large law firms no longer work there five years later.
“We know the associates are going to leave,” Albert growled. “That is why we have to keep associates coming in the door as the others leave. Our talent is vital. Our firm’s need for a large labor pool cannot be overstated. If we don’t meet our client demands we are out of business. Our firm’s talent is synonymous with the quality and capabilities of our organization.”
Albert’s viewpoint on the need for attrition comes as no surprise, considering the pressures and factors that drive this position. He goes on.
“Without associates, doing the work they do, massive research, document discovery and the like, we could not accomplish our primary goals. If the firm closes down or goes out of business, maybe everyone can have balance and workable hours, but they will not be here. Many people will be out of work, and no one is served. Pamela tell me what is your answer to that?”
Flipping the Coin
It is my job as a Law Firm Retention Strategist to flip the coin. I have discovered that law firms do not have to sacrifice the much needed billable hour in order to retain associates.
I began, “Albert, is it true that to incentivize young lawyers, your firm began to tie the amount of associate bonuses to the number of hours billed as a proxy for performance? Doesn’t this actually penalize those who are efficient and do more work in less time?”
Albert replies, “Do you have a better idea, Pamela? How are we supposed to get all of the work done?”
Let’s Look at the Cost
The costs of attorney recruiting and attrition take an increasing toll on every firm’s bottom line. The nation’s largest law firms spend billions of dollars each year to recruit, train, and then lose lawyers from their ranks.”
Associate Salary $160,000 Partner Recruiting Time $135,000 (A billable rate of $500/Hr) Training (100 hrs Partner @ $500.00/hr $ 70,000 Plus 100 hrs for Associate @ $200.00) Recruiting fees 25% of salary $ 40,000 Total Loss due to associate attrition $405,000
When an attorney leaves a firm, the cost 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.
A Solution
I confide to Albert, “I know that law firms are under threat from all sides due to increased competition, client cutbacks, and other factors that make your profits more vulnerable.”
I continue, “I also know that the frenetic pace of the law firm does not lend itself to major overhauls, especially with your associates. However, your business is hemorrhaging money out of the back door. Change takes time. But change must occur to increase your firm’s profitability and make your business model more efficient and effective.”
Albert and I lock eyes for a moment, and I get to the point, “Associates can be reconfigured as teams or what I call pods to increase engagement, enthusiasm, loyalty and retention. We want to remove the silo approach with associates and give more meaning to the work they do. Also, they can work it among themselves regarding their schedules as long as the specified billable hours and cases are completed. It will not mean a massive overhaul in your firm culture. It will only require minor tweaks in current protocols.”
Too Good To Be True?
Albert has a big grin on his face. “Am I supposed to believe that making changes in the organizational structure of associates will increase our retention?”
I answer, “Albert, this is true. I know your firm and your partners are much too busy to implement these type of changes. But it can be done.
A Test Group of Associates
“Albert,” I say, “You want to bring in experts to do this work. As a former recruiter and headhunter, I know the nature of the beast.” We will work with HR and your administrative staff with little guidance from partners and create our first pod of associates. The partner piles on the work to the group, with deadlines and you will watch your productivity and billable hours increase with engaged and enthusiastic lawyers.”
Law Firms Fight Back
The facts have proven a good result. We have removed the threat of young lawyers being stolen due to being overworked, dissatisfied and unhappy.
Law firms, Like Albert’s, are fighting back against competitive entrepreneurs who try to take away their lawyers after they have been trained.
Retention will save law firms millions of dollars. As law firms lower their costs, revenue increases. Law firms can choose to pass these savings onto their clients.
Clients who see the value and continue to return. When customers are happy, they tell other potential clients, increasing business. And now that the law firm isn’t recruiting, interviewing and training new hires, it has more time to focus on practicing law.
Clients who see the value and continue to return. When customers are happy, they tell other potential clients, increasing business. And now that the law firm isn’t recruiting, interviewing and training new hires, it has more time to focus on practicing law. Law firms can find out more through a limited offer of lunch & learns for partners.
Pamela DeNeuve, Law Firm Strategists for Retention
Email: pamela@pameladeneuve.com
Website: https://pameladeneuve.com
LinkedIn: https://www.linkedin.com/in/pameladeneuve
Call Pamela: (904) 607-1211
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