When law firms take on a new crop of associates, the cost is enormous: handsome salaries, countless hours in training, a promise to pay out regular bonuses. Law firms happily commit to those investments, in order to land and nurture top talent. And yet: once associates start to tiptoe toward partnership, at around the five-year mark, most firms will watch on—and do nothing—as the vast majority of those lawyers leave.
That’s no accident. In fact, the private-practice business model relies on attrition. Every year, law firms recruit a large number of junior associates, who then generate much-needed billable-hour revenue. If all those associates reached equity status, however, that would dilute the draw of each existing partner. The long-term objective is to retain the small number of lawyers who might increase the firm’s profitability enough to justify admission to the partnership.
Here’s the problem: the competition for that select group of lawyers is fierce. Let’s say you’ve turned a once-flailing law student into a senior associate with rare legal skills that clients value. Or perhaps a junior member on your team has the entrepreneurial pluck of a future rainmaker. Eventually, your competitors will notice and hatch a scheme to poach those people away.
That’s the core challenge that law firms have to confront: how to retain first-rate associates who could attract a great deal of interest on the open job market. Below, you’ll find seven strategies that leaders in the profession—including small-firm owners and senior partners in Big Law—can deploy to keep the most coveted lawyers on the payroll.
1. The money factor.
In a recent survey of associates in the United States, the research team identified which lawyers were “most likely to leave” their current firm—and asked what lay behind that desire to make a move. The most commonly cited reason was compensation. In a profit-driven industry like law, that finding should come as little surprise. Still, it’s worth reiterating the following point: you need to reward your top talent with salaries and bonuses that reflect their contribution to the firm.
2. Ditch the annual review.
As an attentive leader, you no doubt approach annual performance reviews with a noble goal: to deliver constructive advice that helps your team improve. In practice, though, it rarely works out that way. Unless you offer nothing but compliments, it will sound like you’re spitefully dredging up past mistakes—the poorly composed factum, the badly argued pleading, the one missed deadline—that no associate has the power to correct. Even the most resilient junior lawyer will leave the process hurt and drained of morale.
Now imagine the following scenario. You’ve conducted an annual review with a skilled associate, at which you described several instances of lacklustre work from the previous 12 months. One week later, a legal recruiter surfaces on LinkedIn to tempt that lawyer with an opening at another firm. With the pain of the review still fresh, your promising associate is more likely to write back and entertain the opportunity.
Fortunately, it’s possible to provide useful feedback without pushing your talent into the arms of a recruiter. When you’re displeased with some aspect of an associate’s performance, tell that person immediately. That way, at the end of the year, you won’t have to unload a long list of saved-up complaints. Your next step is to replace the annual review with a forward-looking meeting that sets clear expectations for the year ahead: what skills to develop, perhaps, or how much business to generate. With those reforms in place, you can then take comfort in the knowledge that, when a recruiter does target your elite talent, those LinkedIn messages will go unanswered.
3. Champion the talent you hope to retain.
If you believe in the long-term value of a particular associate, share that opinion with the broader partnership. Talk about what that lawyer brings to the firm—such as strong ties to an important client or specialized legal knowledge—that would be difficult to replace. That sort of internal advocacy plays a central role in who advances up the law-firm hierarchy. Staying quiet, by contrast, increases the risk that your associate will stagnate, feel aggrieved and one day hand you a letter of resignation.
4. Don’t succumb to origination-credit paranoia.
To have a real chance at partnership, associates need direct contact with clients. This is the only way to learn crucial networking skills and build a wider reputation. As a senior lawyer, you can help. Invite your all-star associate to an upcoming lunch with a general counsel. The next month, arrange an informal visit to a client’s office and bring your pupil along. By making the associate’s professional growth a priority, you’ll send a clear message: If you stay, I’ll provide you with a platform to become a truly great lawyer.
Yet this doesn’t happen nearly as often as it should. In truth, partners sometimes bristle at the prospect of an associate forming a close working relationship with a key client. How could that be a bad thing? At most law firms, partners earn an origination credit—and, in turn, a tidy raise—simply by answering the phone when a client calls to pass along a new file. Some partners worry that, if an associate becomes too popular, a client may ring that person instead. And so the kinds of encounters that would bring those two parties together never take place. This type of self-interested behaviour is widespread throughout the industry: a paper on the economics of private practice, published by Harvard Law School’s Center on the Legal Profession, found that internal competition for clients can cause partners to “regard a colleague’s gain as their loss.”
That mindset, however, is deeply flawed. When you ask elite rainmakers what propelled them to the mountaintop, you won’t hear anything about hoarding contact with clients. Rather, these lawyers relentlessly pursue new business, by taking hundreds of meetings throughout the year. If you want to maximize your compensation, do that. Then, please, provide the associates in your practice with the client contact they need to thrive.
5. Follow your firm’s principles.
Perhaps you’ve launched a litigation boutique and told new recruits that you care about work-life balance. Having made that pledge, you’ve lost the right to send urgent emails over the weekend. Maybe you sit on a compensation committee that has vowed to ruthlessly reward client development. No matter how you feel about that philosophy, you have to carry it out. The bottom line is this: once you violate your firm’s stated value system, you’ll lose the confidence of your team—and even your best people will begin to leave. (The implosion of Heenan Blaikie, by the way, is a potent case study of what happens when a law firm abandons its long-standing ideals.)
6. Address burnout.
In the modern legal profession, junior lawyers carry an immense workload. As I’ve written in the past: “At many of Bay Street’s top firms, the average associate lives under an annual billable-hour target between 1,750 and 1,900. Those figures translate to about seven and seven-and-a-half billable hours each workday.” That burden routinely chases gifted legal minds out of private practice.
But there is a way to stanch the bleeding: let associates bill fewer hours in exchange for a reduced salary. When a valued member on your team desperately wants relief from the demands of the job, why not offer an arrangement that lightens the lawyer’s workload and safeguards the firm’s profitability? The downside is virtually non-existent. Even if the associate rejects the deal and quits, you were probably going to lose that person anyway. The potential upside, meanwhile, is that you retain a fabulous lawyer. Clearly, it’s worth a shot.
7. Set a positive example.
Few senior lawyers realize this fact, but it’s the truth: associates watch you all the time. If you bicker incessantly about origination credits, work most weekends and regularly gripe about colleagues, your associates will start to wonder, If that’s what lies ahead, why would I ever want to make partner at this place?
To put it another way, associates won’t stick around unless they want some version of your life. The solution is to foster a workplace culture that minimizes the likelihood of bitter infighting and allows all lawyers, yourself included, to find meaning outside the office. Not only will this improve retention—you might enjoy the practice of law a lot more, too.
Daniel Fish is the editor of Precedent. After joining the magazine more than a decade ago, he’s reported on dozens of topics, including the legal economy, mental health and partner compensation. In that time, he’s received several leading journalism awards for his long-form feature writing.
Are you looking for a way to bolster the profile of a talented lawyer on your team? On The Precedent A-List, you can promote new associates, lateral hires and freshly minted partners. You can also announce when colleagues win an industry award. Get started today.