Culture, not cash, is key to lower turnover at law firms - report
(Reuters) - Demand for lawyers has catapulted salaries to new heights as law firms compete for talent and clients. But a new report suggests that for the attorneys themselves, the money isn't everything.
When asked what would keep them from leaving their firms, attorneys ranked compensation behind clear opportunities for career growth, positive relationships with their co-workers and quality work, according to a new report by the Center on Ethics and the Legal Profession at Georgetown Law and the Thomson Reuters Institute. (The Thomson Reuters Institute shares the same parent company as Reuters.)
The study, released Thursday, comes on the heels of record law firm turnover and a compensation race that pushed starting associate salaries to $215,000 in recent months.
Researchers looked at a cross section of more than 160 mid-sized firms and the highest-grossing U.S. law firms and grouped them based on attorney turnover between 2019 and 2021. Firms with attrition rates in the top 25%, which worked out to an average of more than 19% in 2021, were dubbed “go firms.” Those in the bottom 25% for attrition, with an average turnover of just over 6% last year, were called “stay firms.”
Stay firms increased their average lawyer headcount by nearly 7% over the past two years, while go firms saw headcount decline more than 1% during that time. Stay firms also outperformed go firms financially, with higher growth in demand. And lawyers at stay firms billed an average of 1,754 hours in 2021, compared to 1,698 at go firms.
The researchers also surveyed 900 law firm associates about the factors that could drive them away from their current firms. Those likely to stay most frequently cited their colleagues, their firm’s culture and the quality of their work. Only 9% said compensation was the biggest draw.
Women, minorities, and LGBTQ+ lawyers were overrepresented among the associates more likely to leave their firms — a red flag for law firm diversity efforts, the report said.
“Not only is it incredibly expensive to constantly be replacing lawyers who are commanding ever higher salaries, but the attorneys who are most likely to leave are likely to be the lawyers that law firms will need to meet increasing client demands for broader diversity,” the authors wrote.
Read more:
To stem lawyer attrition, law firms must look beyond cash - report
Law firm diversity gains mainly confined to junior ranks, survey finds
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