Column

How Do We Stop the Churn?

This is the second of a two-part series regarding Associate churn. My earlier post focussed on the Associate. This one focuses on the law firm.

The other day, an international client of mine thinking about re-entering the Canadian marketplace asked me why there was so little loyalty in Canadian law firms these days. He was referring to the amount of lawyer churn in most law firms. I don’t believe this issue is limited to Canadian firms, but the question made me think back over my past 30+ years in law firms and how things have changed.

What’s the Value of Loyalty?

Years back, I belonged to a firm that would give custom- designed diamond pendants to long-standing (female) employees on key work anniversaries to thank them for their longevity with the firm. Compare that to today, when there seems to be very little acknowledgement of the value of sticking with a firm for any length of time, for lawyers or staff.

Many law firms also seem to have the very Canadian problem of lower appreciation for the people under their own roof. (For many years it was understood that great Canadian musicians would have to be successful elsewhere in order to be successful in Canada). It’s been my experience that firms can hold existing members of the firm to higher standards than new entrants. Many times. I’ve seen special consideration (more files, more attention) given to laterals than existing Associates. This, despite the reality that most laterals don’t last five years. That time and effort would have been better-focused on existing Associates to help get them to the next level. It’s like those firms got tired of the old toy and wanted to focus on the shiny new one instead.

I’ve also seen firms offer laterals much higher compensation than existing Associates at that same level.

This has enabled recruiters to run rampant. Many Associates get almost weekly calls with promises of more money and better circumstances. Many have taken the bait, which has resulted in inflated Associate salaries and horrific marketplace churn.

A Career vs. An Annual Revenue Producer

Law firms used to be the place where a lawyer could establish a career. They were carefully trained and mentored on all aspects of the practice – not just the law. They were often partnered with a more senior lawyer who took charge of their tutelage and progression, and spoke up for them within the partnership. In due course, they would be handed the practice of their mentor when that person decided to retire. It was recognized that most Associates would be cost centres until about five years, after which they would start to turn a profit for their firm. Before that they would need to be supported by infrastructure and training and technology and a salary – all at a cost. Now, an Associate has to be profitable much earlier. Firms might create training programs but more often than not, rely on outside sources and Associate self-identification to deal with any training needed. Associates are used to fill practice gaps, rather than the firm asking the Associate what areas of law they wish to pursue. Associates are expected to manage their own careers as best they can in the circumstances. Too often, that management takes the form of moving from firm to firm. Unfortunately, this churn achieves the opposite: we’re growing Associates who never stay anywhere long enough to really learn the practice of law.

Less Leadership from Partners

As the marketplace became more competitive (due to more law firms, more competition from non-lawyers for work traditionally done by lawyers, and more intelligent clients due to the Internet), firms struggled to maintain profitability levels. In one effort to address this, all lawyers (including Partners) were given targets. Compensation – previously based on a range of contributions – became based predominantly on production. This caused Partners to pull back from things like (among other things) delegating work, or spending time on non-billable tasks such as training and mentoring juniors. They wanted to spend every minute they could billing, to optimize their own compensation package.

This dramatically changed the environment for Associates. It promoted more entrepreneurial lawyers who could build up their own practices and teach themselves the law. While these Associates are far more profitable than their colleagues, firms found that there is far less tethering such Associates to a given law firm.

Meanwhile, the other 90% of Associates struggled to stay afloat and grow. Some were able to find decent mentors. Some learned by trial and error. Many simply held on until they were fired. Some left before that happened and became a different law firm’s problem.

A Change in End-Goal

Back when I started in law firms, they were run on a high-leverage model. There were typically three Associates for every one Partner. Lawyers were carefully groomed. Some made it to Partner, others left. But firms got used to a defined timeline of 8-9 years for an Associate to move into Partnership. This meant that as more Associates hit that 8–9-year mark, more Partners were created. Pretty soon, our leverage had been thrown out the window. Some firms – even today – have the same number of Partners to Associates or even more Partners than Associates. This left little room in the Partnership for more Associate graduates so we made the rules tougher. At that point, work-life balance became the new buzz phrase and Associates began to question the traditional lawyer career. They began to question whether or not they wanted to work the hours, and take on the stress, of law firm Partnership.

Something shifted just before the start of the pandemic. While the world slowed down, many law firms sped up. And they found that they didn’t have enough lawyers to do the work. Simultaneously, may older Partners have been reaching retirement age. They are desperate to bring on future Partners to take over their practices. The problem is, we’ve created a marketplace that isn’t so sure they want Partnership anymore, and aren’t trained to be one even if they did want it.

The Fix

Law firms have worked hard at creating this issue. It can’t be fixed overnight. But it can be addressed over time. Here are three suggestions for doing just that:

1. Focus on retention.

We can’t stop recruiters from calling, but we can encourage Associates not to pick up. Money is only important when the most important think isn’t being addressed. What is the most important thing? Ask the Associate, as it might be different for each of them. Ask: “What do you need from the firm in order to feel you are progressing nicely in your career and are satisfied at this firm?” They might want to work remotely part of the time. They might want reduced hours overall. They might want to know what being on Partner track looks like at your firm. They might want to change areas of law. They might want to eventually move into a leadership position at the firm. They might want to become a judge one day. Build rapport and encourage them to share their honest needs so you can be in the best position to support them.

In my experience, many Associates just need someone to help them plan out their career. That means the firm has to care about the Associate’s career, first. A game plan helps to ensure they are in the right practice area. It provides a comprehensive training program rather than saying “hey, I’ll give you money for conferences. Just figure out what you want to go to”. That’s like a parent saying “I’m a great parent. I give you money to go to the mall”. Take your Associates’ development seriously. Partners are the experts in your areas of law. They should develop a training program for their juniors. An actively managed practice group is like super-glue for your Associates.

Encourage your Associates to create an annual personal business plan that ensures they will be one year closer to their career plan goals at the end of the coming year. It starts with a list of declared goals, and then describes all of the actions that will be undertaken in order to reach those goals.

Next, establish a mentoring program. I mean a formal program where mentors are trained in the role, where there is a written agreement between mentor/mentee, and where there are regular meetings with an agenda written by the Associate. This is the second strongest way to build commitment from your Associates.

Many Associates also need specific help. Unfortunately, marketing is not taught in law school, but it’s a necessary skill for today’s legal practitioner. Help them learn how to build (and implement on) a marketing plan. Provide them with some marketing funds. Get them a coach if needed.

Many Associates don’ t know what they need or want. In that case, work with them on a career plan, an annual plan, and then keep the lines of communication and support open so they know that the firm doesn’t just care during planning time, but throughout the year.

2. Teach them the business side, not just the law.

Partners tend to forget that Associates are business people in training. Too often, this training is ignored or only dealt with in the lead-up to Partnership consideration. By then, it’s too late. Firms shouldn’t offer Partnership to anyone they don’t know is a capable business person…but that happens all of the time.

Train them early how to read (appropriate) accounting reports so they can keep tabs on their own production, delegations, business generation, etc. Get them used to regular business planning, and basing decisions on business cases, not gut feel. Ensure they always know where they stand in terms of their targets.

Get them involved in firm leadership whenever possible. Even a young lawyer could run the firm’s United Way campaign or participate in the firm’s recruitment efforts.

Teach them how to effectively deal with staff, record their time with minimal loss, bill in a timely manner, manage client interactions, manage workflow, manage their time most effectively, etc. These are all critical skills for a successful lawyer. They are too important to leave to chance.

Ensure their mentor doesn’t limit teachings to legal issues, but includes business training as well. For example, a mentor could impart wisdom on client management, or file management, dealing with a difficult colleague, or navigating firm politics.

3. Allow for various tracks.

Not all lawyers aspire to or should be Partners. Firms would be well-served by establishing a range of practice options that allow for Associates to chose their level of engagement. Part-time, contract lawyer, permanent non-equity Partner, etc. Create your menu of choices. Clarify the conditions of each option, then allow lawyers to go in and out of options as life changes might dictate. Be really clear, early on, about what it takes to become a Partner in your firm. That means that you’ll need to ensure current Partners are also meeting those standards, incidentally. Associates know hypocrisy when they see it.

A law firm is a business. It needs to make money. It needs to survive, over time. To do both of those things, it needs a roster of revenue producers, over time. And that means we need to hold onto and grow our Associates. This post highlights only three suggestions for creating a more supportive environment for your Associates. But they are foundational. If you can do these three things well, Associates who want a career instead of a short-term money gain will see value in staying with your firm.

An Associate is not a warm body to fill a practice need; they are each an investment. See them as such. Hire them carefully, nurture them mindfully, work with them to meet their needs, guide them into their appropriate role.

Start the discussion!

Leave a Reply

(Your email address will not be published or distributed)