Employee Retention in the Legal Industry
When it comes to employee retention in legal industry, the concern about associate retention has become an industry-wide phenomenon. Most associates change jobs within their first three years of practice. Some leave due to lack of training, mentorship, or work-life balance. Others leave their law firm after one year with the belief that their short experience in practice provided enough evidence that a career in law is not for them. There are even some who join a firm with the sole intention of paying off law their school debt and moving onto a legal adjacent career that is less demanding. In order for firms to improve associate retention, they must face the facts and develop a deeper understanding of the real reasons associates are leaving.
Did you know?
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.
In the last three years, “Big-Law” firms experienced 61% decline in revenue, 83% decline in revenue-per-lawyer, 85% decline in profit-per-lawyer, and 67% decline in profit per equity partner.
Attorney Turnover: Root Causes
Despite the consistent decline of law firm retention, most firms fail to identify and address the real reasons associates leave. The highest cited reason partners give as their primary reason for leaving is money. If this is true, why don’t pay raises result in long term retention? The truth is it doesn’t matter how much you are paying your attorneys. You can’t buy associate loyalty. So why are attorneys citing pay as their reason for leaving? One reason is that separating associates are being asked to give constructive feedback about attorneys they may still work with in the future. Often times, these questions are being asked by an internal employee which can raise concerns about confidentiality. Your associates are smart enough not to burn bridges, especially if they think their feedback will not lead to results. This leads in to the second reason employees may hesitate to be honest. Despite the fact that one of the leading causes of associate turnover over the last 10 years is the lack of training, mentorship and development, few firms actually respond to this feedback with meaningful action. This only further exacerbates the belief that firms do not care for their attorneys.
How to retain law associates
Firms who want to retain their associates understand the changing landscape of the legal industry. Attorneys today look very different from the attorneys of yesterday. Despite the fact that the average JD graduates with student debt around $167k, less and less associates are interested in the commitment it takes to become a partner. A wider range in career options, growth in Alternative Legal Service Providers (ALSPs), and disruption due to artificial intelligence have all contributed to an unclear career path for new attorneys. Firms who are looking to maximize and retain their newer talent must understand the nuanced needs of their associates and design programs that are high impact. This may come in the form of structured development programs, flexible working arrangements, or increased facetime with Partners.
How Can Retensa Help You with Your Lawyer Turnover Rate:
- Exit Interviews start you off with actionable intelligence by asking the right questions. Using a third party like Retensa to conduct exit interviews creates the safety net people need to avoid burning bridges and be really honest about why they are leaving. Pinpoint the root causes for high turnover at your law firm and prepare strategies to help increase retention today.
- Retention Skills Training gives partners and senior associates the tools they need to effectively manage and motivate their best young lawyers. Being a great supervisor or a respected mentor takes different skills than simply being a great lawyer. Retensa provides data-driven training based on customized insights from what your associates say they want and need from leadership. Don’t lose any more billable hours to deal with high turnover and instead invest in training that is customized to the needs of law firms.
- Retention Diagnostic identifies the practice areas where your law firm is excelling when it comes to retention, as well as where it can focus to create the biggest impact. Retensa can pinpoint why new associates join your organization, why they stay, and why they leave in this fast paced and highly competitive market. With our data driven approach and customized software, we offer real-time feedback and insights. Our solutions will help to train, engage and ultimately retain your best lawyers with clear and actionable recommendations.
Retention does not get easier by itself. But there are real tactics that work. It succeeds when we get proactive to reduce turnover and increase connection to the firm and future. Call us now at (212) 545-1280 or email a retention expert here.