According to the NALP Foundation , 77% of associates leave firms within the first 5 years of practice, 40% leave within 3 years and 62% leave within 4 years. Conservatively, it will cost a firm of 400 lawyers that has an attrition rate of 15%, $12 million dollars annually.
Is retention of associates a problem that needs to be addressed? Most definitely.
If one uses the figure of $200,000 in costs to a firm to lose a junior associate (this is a conservative figure as Catalyst suggests it is closer to $315,000), this means that for every 5 associates a firm loses, it will cost the firm $1 million dollars! These costs include the loss in productivity while the position is vacant, wasted training costs, potential clients who may leave the firm with the lawyer, knowledge which the associate will take with him, morale amongst the other associates left behind, recruiting a new hire, time spent by HR and the lawyers in interviewing new candidates, training a new hire and start up time for the new hire. This figure of $200,000 does not include the disruption and frustration experienced by the client with on-going turnover.
Firms are beginning to realize that it is imperative that they seriously consider creative solutions to the retention problem. Following are a number of issues which you may wish to review and discuss with your firm surrounding this issue.
One cannot consider the question of retention, without reviewing one’s hiring practices. That is the first step in determining how likely the candidate is to stay with your firm, long term.
In most Canadian law firms, many of the associates are “home grown”, that is, they are hired on as summer students, brought back as articling students and hired back after they’ve completed their articling year. Let’s review that recruiting process. The law firms and universities arrange a date for ‘on campus interviews’ (OCIs) and all major law firms conduct the interviews at the same time. This creates an incredible amount of pressure for both the firms and students. The students are usually still in their 1st year when they apply to the firms and the interview roster is largely based on those students who have performed the best academically. If you happen to be a “late bloomer” at law school, too bad – hopefully, you’ll be able to land one of the few articling positions that may come available after 2nd year.
If a candidate is granted an interview, they have a whole 17 minutes to make an impression. Talk about an unnatural situation! One can see how this process favours candidates who are outgoing, extroverts, talkative, assertive/aggressive (who can tell the difference in 17 minutes?), confident/overly, confident/maybe even egotistical and let’s face it … good looking. That is, all the criteria that, historically, have been shown to make the best first impressions on most people.
Although the firms go on to conduct more thorough interviews after the OCIs, the point is that the firms are basing their first “cut” on a flawed process and as a result, the “pool” of talent that makes the first cut is probably not the best pool for your needs.
It’s not the candidates who make it through the first stage and are weeded out in the 2nd/3rd level of interviews you should be concerned about – you need to also be concerned about those candidates who were weeded out too early. When reconsidering this interview process, please remember some advice from the popular book, First Break all the Rules – “In the end, much of the secret to selecting for talent lies in the art of interviewing. Most managers are aware of the more obvious pitfalls: – don’t put the candidate under undue stress, don’t evaluate people on their appearance, don’t rush to judgment”.
Lateral recruiting is slightly different, but the same principles are applied. You need to identify what “talents” you want in the candidate (perhaps by studying some of your “best”) and then ask open ended questions to test for these talents. You need to be in marketing mode but be honest with what is required for the job – both positive and negative points. There are a number of other considerations to be made when conducting an interview, but as this isn’t about how to conduct an interview, I won’t go into details at this time.
One of the real benefits about how firms hire students is that for all of the summer/articling students, the firm has a great opportunity to observe/train them before making a permanent offer. Not only can you observe their work ethic, attitudes and talents, you can also bring in speakers, assessors and coaches, to assess their “fit”. You can use the summer and articling year to show them your firm culture. Partners from different departments can explain what is expected from both parties – they need to be realistic with the associates about what is required in order to succeed at the firm. Associates can talk about what they’ve found particularly difficult and positive about private practice. You may even consider having an independent third party give a seminar about what private practice is really like and lead a discussion about mutual expectations, encouraging students to be candid in their thoughts, goals and feedback. Being honest at this stage will eliminate some of the illusions and unrealistic expectations that students may be bringing to the position.
Make a Connection with your team
Making a connection with an associate goes a long way in retaining her. It’s interesting that most associates can identify the exact moment when they decided that they were going to leave their firm. Prior to the event, there may have been feelings of frustration, but until that one incident happened, they were not entertaining leaving their firm.
A huge portion of the candidates I interview have complaints, when boiled down stem from the fact they feel under valued, disrespected, in short, “unloved” or not “part of the team”. It is human nature that everyone, from the time one is young, wants to be part of “the group”.
As soon as they sense they are being excluded from the group the most common reaction is to devalue the group. Then, you couple this feeling of being undervalued with the reaction the associate may receive when they interview with another firm. They will be told “you’re definitely going to be part of our very collegial team”; “this is the type of work/clients we have and we will want you to work on those types of files” – they once again feel valued.
You may feel you’re too busy to concern yourself with every individual’s feelings that may get hurt, but if you approach your relationship with your associate in a respectful way, it will come naturally to you. You shouldn’t have to go out of your way to treat your team members with respect. If you make a regular practice of treating your team with respect, you will win the loyalty of your team and have built a reputation as a respectful mentor.
So how do we establish this connection between the firm and the associate? You can begin by taking an interest in what they’re doing, how their career is developing and what’s happening in their personal life. Proper integration is key to making people part of the team and keeping them for the long term. The integration process is an ongoing one. Depending on personality and level of experience, it can take months or more for a person to become truly integrated into the team and with the clients. All members of the practice group should make an effort to include the new hire and immediately give them work. The fastest way to make the new hire feel like they are part of the team is to keep them busy. Ideally, someone should be touching base with the new hire regularly for the first six to twelve months, or longer if it looks as if the person needs more time. They should be reviewing the person’s hours to make sure she is receiving work, finding out whether work is coming from a number of partners, and seeing if the person is getting involved with internal firm activities, such as committees and social events. One survey found that 80% of employees who had been coached by their managers felt a strong sense of commitment to their organization, versus 46% of employees who received no coaching. Providing them with ongoing feedback sends the message that you care about their development as a lawyer. It has been estimated that approximately 50% of the nonperformance problems in business occur because of the lack of feedback, and about 50% of what appear to be motivational problems in business are actually feedback problems.
It is also useful for the firm to ensure that the lawyer connects with her co-workers. Research has shown that employees who have better relationships with their coworkers are more committed to the organization. Team building events are fun and useful in creating connections within and between practice groups.
Some partners have told me, “taking such an interest in an associates life and career takes time and its such a waste if the associate ends up leaving”. However, these efforts are not a waste of time, because even if the associate leaves, she is far more likely to maintain a strong relationship with the firm, send work to the firm when possible and take a positive message about the firm to the market if she made a connection with the firm while she was an associate.
Although this has been treated as a separate retention issue in the past, this is no longer the case. The male associates are now beginning to seek the same arrangements as women with respect to their desire to spend time with their families. So although this article won’t spend too much time on this issue, there is some important information you should be aware of with respect to women associates in the practice of law.
Just over half of all law school graduates are female, yet, on average, only about 20% become partners. Obviously, the potential solutions suggested in this article will be quite relevant to women, however, the other matters which a firm should explore is internal women support groups, pairing young female associates with female mentors and training on how to client develop from a women’s perspective. Female candidates advise me that they have no female role models to look up to at their firm, they feel isolated and unsupported when they ask for a reduced hours arrangement or that many of the client development initiatives are male focused. Persuading successful women who are in senior roles to act as role models and provide support and mentoring will help firms give female associates the confidence and ability to succeed.
2 Tier Partnership track/ Reduced Hours:
A recent Catalyst study found that 45% of female lawyers cited work/life balance as the number one reason for choosing their current employers. And 42% of associates stated that they would take a pay cut in order to ensure a better quality of life.
Although the most common reason associates offer for leaving their firms is work/life balance, most associates don’t want to work 9-5. In fact, if placed in a 9-5 job, they’ll quickly become bored, feel unchallenged and want to leave. Most of them actually mean they want more predictable hours. They say that they want a better lifestyle, but when we probe deeper, we find that they actually want more control over their life. They feel they’ve lost control, can’t make plans in their personal life and that work is controlling their whole life.
For some, work/life balance means being able to spend more time with their children while the children are young. This is a difficult issue for the firms to deal with because often the associate hits this stage in their life at the same time they are becoming profitable for the firm and should be on the upswing of their career. A study by Altman Weil found that a firms doesn’t begin to recoup its investment in an associate until after 3rd year. And it’s not until mid-4th years that associates have acquired the skills and confidence to run their own deals. How does a firm solve this problem in a very competitive market with such demanding clients?
Interestingly, in preparation for this conference, I spoke to 10 large corporations and asked their general counsels, “In the past year, how many ’emergencies’ have you had where you had to call your external counsel in to do a piece of work that would require an appropriately qualified lawyer to stay after 7 pm to complete the assignment?” The answer from all of them was ‘rarely’.
So, what this suggests is that either:
1. the partners are setting self-imposed short timelines in order to impress the client;
2. work is not being delegated properly – either it’s not being spread around equally or it’s been given to an associate with a lack of experience, so he needs to spend more time in order to complete the work properly;
3. there aren’t enough associates to whom the work can be delegated; or
4. the work sat on someone’s desk until it became an emergency.
Addressing these issues will not solve all of your work/life balance issues, but it will certainly begin to solve some.
In considering changes on a larger scale, some of the firms (mostly in the U.S.) have created a two track partnership system. An associate can opt out of the partnership track for a number of years until their children are of school age.
In order for this to work properly, there has to be a full understanding and acceptance of this arrangement by the partners and the associate. The two most common complaints with these arrangements are:
1. the partner delegating the work doesn’t appreciate the associate is on fewer hours and continues to pile on the work so they end up doing a full week’s work in fewer days;
2. the partner treats the associate with disrespect for deciding to drop off of partnership track or
3. the associate is surprised that she is not put on the best transactions and the quality of the work she’s assigned drops.
The partners must understand that this means the associate will be working fewer hours and shouldn’t discriminate against them for doing so. This requires full “buy-in” from the partnership or else no one will take advantage of the option. From the associate’s point of view, they need to understand that dropping off of the partnership track may mean that the quality of work they’re assigned may be adversely affected for the short-term and, obviously, their timeline to partnership will be lengthened. That said, they will still remain part of the practice group and will be included in practice functions.
Another way firms have addressed the work/life balance issue is to implement a ‘reduced hours / flex hour’ program. In a recent Catalyst study, they surveyed 1400 lawyers and found that 66% men and 84% females felt flexible work arrangements were more important than compensation, career advancement opportunities and challenging work. Supporting this study is one done in the UK which found that 82% of associates (2-5 years post call) believed the best way to retain them is with flex work schedules.
However, like the 2 tier partnership track system, a flex hours/reduced hours program needs to be implemented properly in order to be effective. The partnership must be fully supportive of the program and the associate cannot be stigmatized for taking part in the program. All too often, this is not the case and lawyers’ careers suffer as a result.
Many critics of these initiatives argue that it doesn’t make good financial sense to implement these programs or if they have these programs everyone will want to participate. In short, the firm will not lose money under these arrangements. If you have an associate on reduced hours of 1400 billable hours and conservatively bill him out at $450/hour, the firm will still be profitable. Although the associate may be less profitable than an associate working 2000 hours, one cannot just look at the profits in a vacuum. One must consider the fact that if the firm loses that associate, someone is going to have to pick up the slack, which will lead to more hours worked by other associates who are already overworked. Of course, the firm will be more profitable if all the associates were billing 2000 hours, however, in this tight market, is not always the case that there are full time associates who can be hired to replace the associate who wants to work reduced hours. As well, there is the further benefit that, with less turnover, the clients will be better serviced, there will be consistency in service, and better morale. Perhaps the way for a firm to address this “profitability” concern, may be to have as part of the policy the fact that one is only able to participate in the programs after having worked a certain number of years with the firm.
To address the second concern – that everyone will want to participate in these programs – studies have shown that only 5 – 10% of lawyers will actually do so.
Can it possibly work? The answer is yes, if you have a firm and 2 lawyers with the right mind set. In a job share arrangement, two lawyers share one full time practice. The salary is split between them, pro rata, as are many of the benefits. So, ideally, it should not cost the firm much more than one full time associate. For this arrangement to work, it requires full communication between the two associates including copying each other on all emails and correspondence. It is often a good idea to have the 2 associates draft the job sharing plan which ensures that they have thought about the arrangement in detail.
Although it may sound extreme, firms tend to like it better than only having a part time lawyer, because someone is always there to provide service to the client, the client benefits from having 2 lawyers looking at a problem, there are fewer absences and the associates tend to be more productive.
Offering different types of support to your team can make all the difference in retaining associates and sending the message that the firm has their interests in mind. The best way to decide what to offer is to look at your audience – what are the sources of stress for the lawyers?
Some firms in the UK and US have offered onsite child care, concierge services and take out meal services at dinners (so the lawyers can take these dinners home to their families). Of course, remote access is useful, allowing lawyers to leave work at a reasonable hour to have dinner with their families or attend personal functions after work and then reconnect with work in the evening. Little gestures, showing you care, can go a long way. The Seattle firm of Perkins Cole has a committee that leave baskets of treats in employees’ offices for different occasions. The options are limitless – they don’t have to be expensive to implement and will go a long way in defining your firm culture.
The other important tool in determining why associates leave is, of course, the exit interview. But, surprisingly, many firms do not place much importance upon this step in the retention process. If done properly, this step can provide useful information and clues as to where a firm’s retention problems lie. And, a firm need not only conduct the ‘exit’ interview when someone is leaving – it makes sense to conduct random interviews throughout the year.
In order to get the most out of this step, there are a few suggestions I can make:
1. Use a trained independent 3rd party to conduct the exit interview. Departing employees will feel much more comfortable and are more likely to be candid with someone who is not part of the firm. By ensuring confidentiality, the answers will probably be more honest and candid.
2. Don’t conduct an exit interview on the employee’s final day. There are many mixed emotions which the employee will be feeling on his last day. Most likely, he will not be in the right frame of mind to participate in an effective interview. Usually, it is best to schedule the interview a few days after the candidate resigns or even after he leaves the firm.
3. Your questions should be consistent in order to ensure that the data you’re collecting from these interviews are of most use. You should work with the independent 3rd party to compile the questions most suitable for your firm.
4. You should conduct exit interviews on all departing employees – both those who leave voluntarily and who are terminated. Also departing employees at all levels – not just associates. Remember, one of the purposes of this step is to help you in your retention program.
5. Finally, make sure that you use the data. So often, the information is gathered from the departing employees and then filed away. This information needs to be shared with relevant practice leaders and partners and acted upon if need be.
If you are using a 3rd party to conduct the interview, make sure you relay to that person the positives you saw in the employee so this message can be passed on to the employee. It is effective to end the interview using this information – for example, “Firm A told me they’re very sorry to see you go. They thought you were a great team player and had a long future with them. That said, they understand why you’re leaving and hope if you ever decide to return to private practice, you will consider Firm A.”
Of course, even if you’re using an independent 3rd party to conduct the exiting interview, you will need to spend some time with the departing employee on their final day to ensure the relationship ends on a positive note. Keep in mind, that employee will be let loose on the market, so you need for her to leave on a positive note.
Attrition is an issue with which all law firms will always have to deal, however, there are ways to address this issue which will distinguish your firm from the field. You can respond to the associates’ concerns while still running a profitable firm. Effective programs, however, will require flexibility and a mindset shift by the partners. Some of these suggestions may seem like drastic measures, but balanced against the cost of attrition, your firm will benefit in the long run.