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The COVID-19 pandemic has shifted much about what we once considered business as usual. It has created unmatched levels of flexibility across industries—many of which had very few flexible options pre-pandemic.
That said, it has also (understandably so) caused professionals around the globe to reevaluate their circumstances, both in and outside of work. It has also caused a mass exodus from career paths that perhaps don’t spark as much joy as they could—to paraphrase Marie Kondo.
The Great Resignation, as it has been coined, began around the spring of 2021 and has impacted every aspect of the labor market as people continue to leave jobs, change vocations, or simply drop out of the workforce at a shocking pace.
In November 2021, more than 4.5 million Americans left their jobs voluntarily—that’s 3% of the workforce in one month alone, according to USA Today. And a recent study conducted by Microsoft indicated that more than 40% of workers worldwide said they are considering quitting their job or changing their profession.
It’s no surprise that the legal profession is likewise experiencing unprecedented turnover and staffing challenges.
More than a blip on the radar
Many have questioned if this trend is merely a case of typical law firm attrition, or perhaps it has been amped up a bit because of the pandemic. How a firm chooses to answer that question will directly impact its staffing models for the immediate future.
Initially, many firms responded to the cash flow crisis created by the pandemic by cutting expenses and reducing overhead. Downsizing was the last resort for most firms despite the state of flux, as some feared being perceived as struggling or unstable.
Instead, changes in firm headcount have been influenced by staff decisions. Perhaps emboldened by the shifting power dynamics, the rolling 12-month turnover rate for associates reached 23.2% through November 2021. This was a significant increase over the 18.7% turnover rate before the pandemic in 2019.
Am Law 100 firms experienced the highest associate turnover rate at 23.7% over that same time frame. This led to a lower net headcount growth compared to their down-market counterparts. Yes, the higher leverage of larger firms has something to do with this discrepancy, but the fact remains that each segment saw rising associate turnover in 2021.
Compensation competition
In response to increasing talent pressures, virtually all large and midsize firms increased compensation, added performance and retention bonuses, or implemented signing or referral bonuses last year. The result was a bidding frenzy for qualified associates that saw compensation growth increase by 11.3% through November 2021. These increases were necessary, as the American Lawyer found that nearly 27% of the 3,700 associates from 77 Am Law 200 firms surveyed said they would leave their current law firm for higher compensation.
A few firms have even taken a preventative approach by compensating staff who stay off LinkedIn, pulling associate biographies from their websites, and openly discouraging networking and bar association involvement.
Whether these are effective long-term tactics remains to be seen, but there is growing evidence pointing to specific factors that influence the decisions of staff and associates whether to stay put or move on to greener pastures.
Image from Shutterstock.
Stay or go? The new motivation
Unexpectedly, the “throwing money at the problem approach” taken by some law firms may have encouraged a shift in how employees evaluated their current firms and those they considered potential landing spots.
Traditional criteria such as compensation and bonuses, assigned practice groups, and partnership prospects remained important. But a new set of criteria has emerged, one that is changing the way both employees and firms should approach recruiting and retention: better work-life balance. Law firms should consider an approach to help their staff find that balance through improved technology and software, flexible hours and remote work, as well as evaluate nonbillable activities.
The pandemic has reshaped thinking around the value of work. The Thomson Reuters Stellar Performance: Skills and Progression Mid-Year Survey uncovered three specific priorities legal professionals are factoring into their career decisions.
- • Balance: Young professionals are more in tune with work-life balance and place a higher value on mental well-being, leisure and other activities outside of work than previous generations.
- • Family: A higher percentage of the professional workforce are mothers. Likewise, men are taking a more active role in child-rearing than previous generations, as younger professionals juggle more domestic responsibilities across the board.
- • The Long Game: Many Generation X and millennial employees have long since conceded that their retirement will likely come much later in life than their elder counterparts. The prospect of working for an extra decade—or more—has tempered the enthusiasm for grinding away during their formative years.
Opportunities for smart firms
There is opportunity in this job market for employees, but smart firms are also taking advantage of the changing attitudes toward work.
Some larger firms attempted to pull the “salary increase lever” in an effort to stem turnover. The increase in corporate work brought on by pandemic instability has, thus far, made these pay increases possible. Larger firms also have the ability to put more resources behind training and professional development as well as to invest in productivity-enhancing technology, which can help improve retention among lawyers and staff.
Some midsize firms have taken advantage of the shift in priorities and focused on providing more work flexibility by basing associate compensation not on hours billed but on productivity and quality of work while touting benefits that are often harder to find in larger firms, such as a closer connection to the community where the firm operates. This allows employees to feel more in control of their work-life balance.
Smaller firms with a more agile and flexible culture may now be able to compete for top talent that was unattainable before the pandemic. Both associates and partner-level attorneys may like the intimate, family-like structure of smaller firms and view them as a more stable environment as well as suitable for their shifting preferences in working arrangements. Regardless of firm size, the fact that remote and hybrid work options have also enabled legal professionals to seek jobs outside of their neighborhoods—sometimes even outside of their states—is another undeniable bonus when it comes to finding good talent.
In conclusion
The legal profession has not been spared in the Great Resignation but shifts in the market for acquiring talent may ultimately lead to more efficient practices, a more engaged and satisfied workforce, and a reduction in the burnout historically experienced by younger associates looking to make a name for themselves.
Compensation will always matter. But firms of all sizes can now compete for talent as employees and attorneys seek to feel value and meaning in their work; to feel appreciated and recognized; and to have opportunities for professional growth and personal satisfaction.
See also:
ABAJournal.com: “‘The pandemic has left its mark’ on law firm talent management, says legal tech CEO”
ABAJournal.com: “The winners in law’s ‘Great Resignation’ will be firms that focus on innovation, not compensation”
ABAJournal.com: “Top 4 unexpected culture killers for post-COVID-19 hybrid work”
ABA Journal: “Much Ado About Nothing? When it comes to lawyers, is the ‘Great Resignation’ really just the ‘Great Reshuffle’?”
Thomas MacDonald is director of product management at Thomson Reuters.
Mind Your Business is a series of columns written by lawyers, legal professionals and others within the legal industry. The purpose of these columns is to offer practical guidance for attorneys on how to run their practices, provide information about the latest trends in legal technology and how it can help lawyers work more efficiently and strategies for building a thriving business.
Interested in contributing a column? Send a query to [email protected]
This column reflects the opinions of the author and not necessarily the views of the ABA Journal—or the American Bar Association.
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