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Has the time come for law firms to rethink their retention strategies?

Headed for the exit

Last year, when media outlets started reporting a global surge in the number of people quitting their jobs, most attributed the trend to the pressures imposed b­y the pandemic on essential workers — the ones who’ve had to mask up every day for modest wages to keep the warehouses stocked and the wheels of the economy turning.

But the “Great Resignation” is a white-collar phenomenon now, affecting even those lucky enough to work from home. The 2022 Report on the State of the Legal Market, compiled by the Center on Ethics and the Legal Profession at Georgetown University and the Thomson Reuters Institute, found that, despite soaring demand for legal services, U.S. law firms are struggling to attract new talent and keep the people they have.

Many firms have responded by throwing money at the problem through higher salaries and retention bonuses. The 2022 legal market report strongly suggests that approach isn’t working: Firms in the U.S. with the lowest turnover have “tended to have the lowest compensation growth among firms in the market.”

Those tracking Canada’s legal services market say the same things are happening here. People are walking away, and money alone isn’t getting them back. 

“I would say the Canadian market is mirroring the U.S. one,” said Warren Smith of Smith Legal Search in Vancouver. “We get much better data out of the U.S., and it’s reporting a 25% attrition rate. Usually, that rate is about 15 to 18 per cent.

“Actually, the attrition rate here might be higher, because I know a lot of U.S. and U.K. firms are coming here to recruit.”

So if money isn’t working, what would? Opinions differ, but most people who work in legal recruitment say the remote work experience has upended expectations for many people in the industry. Working from home has shown them what they’re missing — both good and bad — by not going into an office every day.

“People learned that, after a few months working from home, certain aspects of their lives improved,” said Jordan Furlong, legal sector analyst and principal at Law 21. “They had a taste of that kind of living and decided they didn’t want to go back to the hours-long commutes.

“And law firms sometimes aren’t very pleasant places to work. They’re very high-pressure workplaces, with a high degree of aggressiveness and a sense of people always hovering over you, of always being tested. Lawyers are finding out that they can get done 80% of what they used to do without all that unnecessary anxiety.”

Talent shortages make for seller’s markets. The prevalence of remote work in legal services means lawyers can now work for anyone, from anywhere — they can be paid in U.S. dollars while enjoying the lower cost of living in suburban Canada.

That means firms must concentrate on quality-of-life factors if they want to keep their staffing levels secure. For many lawyers — younger associates especially — the loss of the in-person workplace is robbing them of both professional feedback and mentoring opportunities.

“Because everyone’s gotten used to working remotely, many are experiencing a disconnect from their workplaces, from the team,” said Sameera Sereda, managing partner at The Counsel Network. “And the consequence of that disconnect is a lack of loyalty and trust.

“If you’re a junior associate right now, half of your career has been spent online. If your firm isn’t reaching out to you on a regular basis to have meaningful conversations about the work, you might be asking yourself, ‘Why should I care about this firm? What’s the point?’”

The kind of isolation that goes with remote work leads to introspection, said Smith — “to big questions about the future. Am I happy? Am I valued?

“If the answers to those questions are ‘no,’ another $20 grand probably isn’t going to change them to ‘yes.’”

Lawyers who can’t be coaxed with cash can still be wooed by appeals to their professional instincts and the promise of greater independence, said Furlong.

“Autonomy, mastery, purpose,” he said, citing research by U.S. author Daniel Pink. “People want the authority to make decisions. They want to get better at what they do — this is especially important for lawyers who are always looking to expand their skill sets. And they want what they do to matter.

“Offer your people opportunities to be creative in their work, to learn new things. Tell them you’re going to give them every opportunity to get better at what they do.”

Most associates won’t become partners. Some don’t want to. Furlong said law firms need to understand that fact and treat their employees accordingly.

“To those who are looking to make partner, you can say, ‘Here’s what’s expected of you,’ and walk them through the process,” he said. “But make it clear to your people that, whether they stay or go, you want to help them to become better at their work than they are now.”

And don’t assume that everything will, eventually, go back to ‘normal.’ Remote work, for all its drawbacks, is probably here to stay because it offers people more control over the work-life balance.

Furlong said that means firms must learn to let go a little — to trust their people to do the work with a minimum of supervision.

“There was always a sense in law firms of a need to control people, a sense that if the partners couldn’t see what you were doing at all times, they couldn’t trust you,” he said.

“That kind of attitude won’t work anymore. Trust your people; give them the autonomy they need and deserve. If you can’t, they’re not going to be around very long.”