Law has traditionally viewed itself as a blue ribbon career. However, many lawyers are opting out of working in firms due to a number of factors that include: the high demands placed by firms on practitioners, aspirations from lawyers to pursue other career options, and the desire for a better work-life balance. The number of significant issues facing firms in attracting and retaining talent, coupled with the reality that lawyers must now do more with less, demonstrates that the legal industry is not immune to the same issues facing other professional business sectors.
With many law firms expressing the desire not only to attract but also retain talent, we’ll take a closer look at some of the issues preventing firms from achieving their goals, and some possible solutions to keep talent within the industry.
Not all lawyers want to work in a firm
Dr Elisabeth Hetterich in her article: “How to stop lawyers leaving law firms” in Proctor, found that the desire to become law firm lawyers is not an aspiration shared by all practitioners, and that a number of research participants viewed work in a firm as a launching pad to other career paths. “The research found that practitioners feel that they have many career options open to them and that they do not feel themselves bound to the ‘traditional’ law firm career path.”
In addition to using a firm as an avenue for other careers, the other significant reason as to why practitioners leave firms is the considerable time commitment that is expected from law firm staff.
“Statistical analysis of the survey data confirmed this by establishing that career advancement in law firm was directly linked to the hours worked and recorded, as well as after-hours marketing.”
Retaining talent is a problem that cuts across generations
There may be a perception that it is younger lawyers that are the demographic most likely to leave firms. However, Dr Hetterich found that all generational groups are affected and many are looking for other career options beyond working in a firm.
“Contrary to the common assumption that it is the young generation of lawyers which shows a lack of loyalty to firms, the results were consistent across generational groups. It is not only young practitioners who believe they have these options; it is just as common in practitioners of all ages.”
Law firms aren’t hiring
The 2015 Australia: State of the Legal Market report published by the Melbourne Law School and Thomson Reuters Peer Monitor (the Melbourne Law School Report) whose results were based on the responses from the “Big 8” and “Large Firms”, found that the industry saw a decline of 3.8% in the number of lawyers employed, with a further 2% decline in demand. The result of the decline meant that the lawyers on staff had to “service a greater proportion of the total demanded legal work.”
Traditional incentives for lawyers to stay may no longer be effective
A number of incentives previously used such as the offer of partnership or more money to compel lawyers to stay, may no longer be as successful as it has been in the past.
The Australasian Legal Practice Management Association (ALPMA) and Rusher Rogers HR Solutions in the 2015 ALPMA/Rusher Rogers Legal Industry Salary & HR Issues Report (the ALPMA Report); found that most firms surveyed were planning on increasing salary at, or above CPI. The Melbourne Law School Report also found that staff compensation rose 1.5 percent and benefits grew by 4.7 percent in 2015 amongst the Big 8 and Large firms.
Although money may be seen as an incentive, Dr Hetterich writes that money has “been found to be ineffectual”, and she adds that subsequent counter offers have resulted in “inflated salary costs,”, therefore, negating the desire of many firms to also lower operating costs.
Another carrot previously used by firms was the promise of partnership. However, Dr Hetterich also puts a dampener on this approach by citing other research which found that “only 19 percent of junior lawyers in large international law firms actually hold partnership aspirations.”
Even if a lawyer held aspirations for partnership, the Melbourne Law School Report found that 10 percent of Big 8 firms, and over 5 percent of large firms have reduced the number of equity partners. “Equity partner status is not only more difficult to achieve, it’s also more difficult to maintain.”
Can improving the work-life balance in firms be the solution?
For firms wishing to attract and retain talent may require some lateral thinking that goes beyond the traditional incentives. As a consequence, firms have begun to offer other incentives such as more flexible work hours. The ALPMA Report found that 94 percent of firms surveyed with staff of more than 25 people offered more flexible working hours in 2015, compared to just 53 percent in 2013.
However, it is important to note that if firms wish to offer incentives such as more flexible work hours, it is essential that the incentives are followed through writes Dr Hetterich. “To gain the benefit of these arrangements and thereby manage the costs of staff turnover, firms must truly support the agreed to arrangements.”