Law Technology Today From the ABA Legal Technology Resource Center
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Associate attrition can have a damaging effect on a law firm’s bottom line. Yet, despite industry-wide recognition of the problem, the National Association for Law Placement (NALP) recently reported that the rate of associate attrition stands at 37% within the first three years of practice and 77% within the first five. Read into those numbers and you can see that most attrition occurs at the critical mid-level juncture, when an associate begins to contribute more to the firm’s bottom line than they cost to employ. What’s more, the estimated cost of replacing that mid-level associate is $300,000.
So, the $300,000 (and then some) question is: can anything be done about this?
The short answer is yes. But, it takes time and, crucially, it takes data. Data allows firms to identify the “success factors” that are unique to them and to leverage those factors to recruit the candidates who are most likely to thrive as a part of their firm’s distinctive culture—and ultimately, to remain once they’re there. In other words, law firms can use data to mitigate the shedding of in-house talent by recruiting, hiring, developing, and promoting their best and brightest associates.
Factors that impact long-term associate retention are already in play long before a new lawyer’s resume enters the recruiting pipeline. A firm’s culture is constantly taking and retaking shape; its reputation is shifting or solidifying, and its recruitment efforts are targeting its supposed needs. Meanwhile, the candidate pool is filled with aspiring attorneys who have different backgrounds and their own professional needs and wants. Both sides of the equation are trying to leverage what they “know” about “how things are” to position themselves as the other’s best option. But while measuring the status quo can provide helpful points of reference, it does not connect the dots in a way that allows for analysis and the formation of a results-oriented action plan geared towards improving associate retention.
That’s where data comes in. Because data is the truth. It is unbiased and unconcerned with what people think they know about how things are.
For example, industry research tells us that diverse teams are smarter, more innovative, and better at decision-making. And every firm out there will tell you they are committed to diversity. Yet, despite compelling evidence to support the benefits of recruiting and retaining a truly diverse team of attorneys, data from both law firms and legal departments shows that employment figures do not reflect our society’s demographics, and diversity numbers at law firms have remained flat since 2009.
Firms can combat this by understanding where they are falling short, how others are doing better and what they can be doing differently. Benchmarks can be used to assess an individual firm’s recruiting and retention practices and to rank that firm’s diversity profile versus peer firms. Leveraging successful diversity initiatives is a way to expand client engagement and increase market—both of which are known to contribute to increased retention. So, in other words, data can lead to the hiring and retention of a more diverse workforce, which has been shown to translate into greater profitability, which has been shown to improve retention.
Of course, while data paves the way for better strategy, gathering good data demands strategy on the front end as well. Engagement surveys and leadership reviews are great ways to collect data and uncover issues when they are thoughtfully composed and periodically deployed. It is important for firms to understand what they are trying to glean and how their survey questions complement each other on their way to painting a full picture. And it is equally important that they are utilized on a schedule, such that they measure progression and success in certain areas over determined periods of time. Collecting structured feedback in this way gives firms the opportunity to replicate successes and identify and address problems.
I personally have seen firms increase their four-year retention rate by 11% overall (16% for lateral hires) simply by changing the way they interview and by incorporating surveys and reviews. That’s no small thing. Associate attrition is a bottom line issue for every law firm, which makes developing strong benchmarks for analysis and initiatives for more retention-minded decision-making a natural priority, if not an outright responsibility.
