Law Firm Musical Chairs: Hidden Reasons Behind Associate Attrition Rates and What Firms Can Do About
Updated: Dec 28, 2018
Reprinted from the American American Bar Association Blog, https://www.americanbar.org/careercenter/blog/law-firm-musical-chairs/
It's no secret that law firms lose a lot of their associates each year. Some even lose a quarter of them. High attrition is not just disruptive to clients and damaging to a firm's overall productivity, it's expensive!
According to the NALP 2017 Update on Associate Attrition, losing a single associate can cost a firm between $200K-$500K. Damien Black provided a good article in Above the Law outlining some of those costs, which include recruiting costs (i.e., outside recruiters, lost billables due to interviewing, advertising, etc.), training costs, and resource shortages (i.e., lost billables given that there is no one to do the work).
So how much money exactly are firms leaving on the table because of high attrition rates? Looking at 2017 numbers, which are pretty representative, the figure is staggering. Over 7,600 associates in the top 200 firms left, and over 5,600 lateral associate hires were made (suggesting that the majority of the associates who left were replaced) (Figures are taken from Leopard Solutions, LLC). Accordingly, no matter what figure you look at, it’s fair to say that that high attrition - whether due to hiring and recruiting costs or to lost resources - costs the top 200 law firms well over $1 billion dollars each year alone. That’s one billion dollars per year that these firms are leaving on the table simply because they are unable to get their employees to stay put. And in case you’re thinking this is standard across all industries, it’s not. Data suggest that attrition rates are about 10 times higher in law firms than they are in well-run corporations. What is clear is that the legal industry has a retention problem. What is unclear, however, is why that is, and what, if anything, can be done about it.
In the article mentioned above, Damien Black points out that the same 2017 NALP report cited “work quality standards not being met” as the number one reason for associate attrition. He posits that giving associates more meaningful work will help to slow the churn. But what neither NALP nor Damien Black addressed is why firms found that work quality standards were not being met. Getting a job at a top 200 law firm is hard to do. It is so hard, in fact, that most people coming out of law school don’t. Generally, the people who do get top jobs are the type of people who are used to performing at very high levels - the type of people who get A’s across the board. So are we really to believe that the majority of people who generally excelled prior to starting a career in law suddenly can’t hack it because being a lawyer is just that hard? Or that they are phoning it in and doing a poor job because the work they are doing is too easy (i.e., not meaningful)?
In my experience, neurotic/type A people - which describes many lawyers - tend to work hard and worry about everything they do, not just the meaningful work. In other words, they are not really the phoning-it-in type. So if they are not the kind of people who are used to performing at below expected levels - either because the work is too hard or because they are bored with it - then perhaps there is something else going on, which is driving associates away.
I would say that the reason work quality standards are often not met is not just that associates are lacking meaningful work to do (although no one likes to feel like a monkey at a keyboard doing doc review). I think there are two primary factors at play that cause work standards to fall short, either (or both) of which cause associates to leave: (1) the work associates are doing does not align with their strengths, interests, and end goals and/or (2) the associates are working for people (usually partners) whose personalities do not complement theirs in a professional sense.
Maybe Meaningful, But Not The Right Work
For many people, the issue with their law firms is not that they aren’t getting meaningful work (they might be doing pretty substantive work), but it is not the work they want. As a recruiter who is working on a platform to make it easy for people to find the right jobs for them, I often talk to people about why they are unsatisfied in their current firms. Oftentimes, it is not that people are stuck doing document review, or due diligence, or some other boring and semi-brainless task (though that certainly happens) - it’s that they are not getting the career experience they want. Because the experience these firms are providing is not where their strengths and interests lie, they end up not having the most productive careers. For instance, if an associate is entrepreneurial and wants to grow a book of business, then perhaps having that associate write briefs and motions all day every day, with no client interaction or client development training, will likely lead to poor results, even though writing briefs and motions is substantive and meaningful. In that case, that associate could be a decent but not stellar writer, but is excellent at business development; if the firm recognized that associate’s skills, interests, and end goals (and perhaps was less rigid about perceived class-year appropriate tasks), it might be able to use that associate more productively, thereby benefiting both the associate and the firm.
So what can firms do about this? For one, law firms can provide more information about themselves and distinguish themselves more meaningfully from each other. The fact that law firms haven’t really yet figured out how to differentiate themselves from one another means that lawyers tend to make their decisions about employment – especially right after law school – largely on social factors (meaning whether they liked the people they talked to), and not on tangible data.
If associates had better and honest information about firms (like whether the partners have local clients that might allow an associate to go in-house or the firm has an established outplacement program, whether a firm compensates associates for bringing in business or provides media training, or what the compensation structure at the partner level looks like), they could make more informed decisions at the outset; thus, the associates would be picking firms that better suited them, and they likely would have more positive experiences.
And while people might not know exactly what they want in a firm experience right after law school, they often do know what interests them and where their skills lie – so having real insight into the differences between firms would go a long way in helping young attorneys make better decisions for them (and, ultimately, the firms). And then, of course, firms need to do more than just pay lip service to understanding and providing their associates with the career experiences they want if they want to use their associates in the most productive ways and keep them around.
Personality Clashes - They’re Real
What I think is the more interesting but less discussed reason for high attrition is the reality that some personalities are just incompatible. In these instances, it is largely irrelevant what work the associate is doing; if the associate and partner don’t have complementary personalities, then they are very unlikely to have a successful working relationship. A look at any discussion of Myers-Briggs tests can reveal quite obviously that there are some personalities that are more compatible than others (this is true in both work and romance).
I, for one, like to work with people who challenge me and think of things I didn’t and can figure out what I mean to say even if I don’t say something correctly. This is true, even if they work slowly. I am less likely to enjoy working with people who might be very friendly, competent, and efficient, but either need me to spoon feed them assignments or are unwilling go the extra mile to make things that I suggest better (they just give me exactly what I ask for every time). In my experience, as a former lawyer, legal recruiter, and entrepreneur, I have seen people struggle in jobs even though they are brilliant. The issue was not the type of work they were doing, it was the fact that they were working with people who they didn’t jive with professionally; this unproductive working relationship led to poor work results (and oftentimes, bad reviews).
For example, one of the smartest lawyers I know left his BigLaw firm after getting pretty bad reviews from one partner he had a terrible experience working with. The firm would say his work standards weren’t up to snuff. But this person graduated cum laude from a top ten law school and is one of the best writers I have ever met. (I read some of his work and know other associates he worked with, so I can say this with a high degree of confidence.) So maybe the real issue was that this associate, given his personality type, was never going to be able to make that partner happy. Indeed, this associate jumped down every single rabbit hole the partner he was working with sent him into, and because he wasn’t good at pushing back, he got exhausted and made some mistakes that annoyed the partner. (The next person who worked with that partner pushed back and did a better job of prioritizing assignments and communicating that – and they had a much better working relationship.)
I can give you ten other similar examples of really intelligent people with top credentials getting bad reviews because the personalities of those associates was not appreciated by the partners who reviewed them, and the associates – who may have killed themselves getting something done – delivered assignments that were not what the partners wanted. It doesn’t mean, though, that these associates were not capable; in fact, if they worked with someone they clicked with better, they probably could have been a productive asset to the firm.
The question, then, is, what can firms do about this? What if a firm has difficult partners, or they have an opening they just need to fill? My suggestion is to make personality fit a bigger priority. Even partners who may be perceived as difficult generally have a good working relationship with someone. I have seen it firsthand. I suggest that interviews in the legal industry take a page from corporations and tech companies and be a little meatier - two people may not work together well even though they both love reality television or traveling. Seeing how a person works and thinks and would handle various situations will give firms a better insight into whether that person is a good fit for a given group. In addition, at De Novo, we are working on using and analyzing data to create rich profiles on firms - including personality assessments of the individuals who comprise specific groups - in order to better match lawyers up with firms and increase the likelihood of success of associates at a given place.
Accordingly, I think the problem of high attrition can be boiled down to the simple fact that lawyers and law firms do not make optimal decisions when it comes to determining fit. Firms should do a much better job of being open, honest, and transparent when it comes discussing how the business side of the law firm works and things they see as potential weaknesses, like hours, difficult partners, salaries, etc. Again, there will still be someone who is right for that group or for working with that difficult partner, and it is better, i.e., significantly cheaper and less disruptive for clients, to find the right fit than to hire someone only to have that person leave not that long after. (And if firms were more open and honest and could differentiate themselves from each other better, they may feel more confident in being able to attract the right talent for them and not feel that they need to keep up with the Joneses – or Cravaths – at all costs.)
Indeed, this transparency should start during On Campus Interviewing (OCI). Because all firms pretty much sound the same to attorneys – especially ones coming out of law school – it is no surprise that attorneys frequently fail to get it right when it comes to where they will feel most professionally satisfied. And, given that interviews are full of fluff and rarely focus on issues that would determine professional compatibility, it is no surprise that firms don’t necessarily select associates that are the best personality fit for them.
If lawyers could do a better job of picking firms that aligned with their skills, interests, and end goals, and firms both worked with associates to give them the career experience they want and committed to doing a better job of analyzing personalities to optimize working relationships, this would do a lot to stem the tidal wave of associate attrition and save law firms a tremendous amount of money.
CEO/Founder, De Novo