The legal hiring market has become hugely unpredictable. The industry has witnessed the highest rates of lateral hiring ever experienced over the past couple of years: in the US, lateral moves among law firm partners increased 43% over 2020, while the number of associates switching firms was up 149% year-over-year according to the National Association for Law Placement (NALP).
With 32% of NA and 31% of UK firms confirming lateral hiring has increased in the last two years, how are firms protecting essential client and market expertise? Younger associates have different expectations than their older colleagues. Success is no longer measured only by billable hours: there is more focus on wider career development, beyond the traditional road to partnership, including exposure to a diverse client base. As such it is important to embrace additional ways of both measuring growth and defining value in ways that reflect the new thinking of a younger generation.
Are firms considering these increasingly diverse and individual career expectations? What processes are in place to ensure knowledge transfer between lawyers, especially when lawyers are working remotely? How can firms balance employee demands for hybrid working with strong on-boarding processes that are key to reinforcing corporate culture and building strong collaboration? And, of course, once employees are up and running, how long will they stay?
The disruption associated with this level of employee change is hugely costly and can also have a damaging impact on overall morale – adding to the risk of more employees leaving. Firms cannot afford to hemorrhage talent in this way and many are relying on the blunt tool of increasing salaries to counter the risk, with junior lawyer salaries increasing quickly in both the US and UK.
Understanding Employee Expectations
This model is not sustainable: law firms can’t continue to rely on salary increases to attract and retain talent. It is imperative to look far more closely at the expectations of these young professionals, including career development and a better work life balance.
Respondents report that the increase in salaries for junior lawyers is having a wider impact on firms, most notably a drive to maximize the utilization of lawyers (50% of NA, 43% of UK) to get the best value from this increasingly expensive asset. Firms are also looking to delegate work to the most cost-effective resource (42% of NA, 43% of UK), in a bid to avoid burdening high value lawyers with low value work that could dent morale or encourage individuals to look elsewhere for a more challenging and inspiring working environment.
Firms (47% of NA, 48% of UK) recognize the need to focus more on maximizing the engagement of lawyers, in a bid to improve long term retention. Two fifths (39% of NA, 40% of UK) also confirm a greater focus on lawyer development.
Focus on Retention
Firms are committed to improving retention and recruitment; 49% of NA, 48% of UK confirm reviewing career development options for associates is an operational priority. There remains, however, a disconnect between the firms’ intentions and day to day operational reality due to a lack of information. How can firms provide the level of support required to ensure lawyers feel on track with career development and that work is equitably allocated without visibility of the underlying data? Crucially, how can firms attract new employees – especially associates who expect a far better, more engaging and inspiring approach to resourcing matters?
The biggest concern for firms is that endemic lack of information available relating to employees skills, opportunities and development needs. Over half (54% of NA, 50% of UK) have no data or only partial data relating to the different skillsets of each associate (another disappointing increase year on year – 40% of NA, 36% of UK). 54% of NA, 55% of UK also have no data or only partial data relating to the opportunities available for associate career development; while 51% of NA, 49% of UK have no data or only partial data relating to lawyer training and development needs. How can firms meet the needs, especially within the younger generation, for valuable work opportunities and continual development without this essential information?
To maximize retention and minimize any client impact because of lawyer turnover, it will be vital to overcome the challenges of limited visibility of associate availability, skills and capabilities. Firms need to invest both in dedicated resourcing experts and supporting resource management technology; leveraging transparency around workloads, billable hours and lawyer expertise to ensure attorneys expectations are met while also safeguarding profitability. Wrapping this approach with the individual lawyer’s career development goals is the panacea.
This was an excerpt from the report 'Legal Resource Management - The Present and Future Impact on Law Firms'. Access the full report to dive deeper into the findings from over 800 legal management professionals:
