Does Money Matter? Reactions to Report on Law Firms and Lawyer Retention
Recruiting and retention initiatives remain top priorities for law firms amid relentless competition for legal talent. Thomson Reuters today updated data that was first provided in the 2022 State of the Legal Market Report, showing that higher compensation or lower workloads, by themselves, are often not enough to keep attorneys from straying and seeking a new job elsewhere.
While firms with low turnover (Stay firms) increased associate compensation 5.2% in 2021, they paid their lawyers less, on average, than firms with high turnover (Go firms). Overall compensation at Stay firms, in fact, was 16.6% lower.
In addition, Stay generally saw higher productivity than Go firms.
The Law Firms Competing for Talent in 2022: Will Lawyers Stay or Will They Go? report, released last month by the Center on Ethics and the Legal Profession at Georgetown Law and Thomson Reuters, discussed in-depth findings from analysis of law firm financial data as well as interviews with thousands of attorneys. It offered insights on how attorneys decide whether to remain at their current firms or pursue other opportunities. The report found that attorneys ranked factors such as firm culture, a clear career path, feeling supported in their work, and flexibility on when and where to work as more important than compensation or workload.
Today, we share perspectives from leading industry journalists and bloggers on the report findings.
In Above the Law, Joe Patrice noted the report “provides a ton of data on the differences between Stay and Go firms.” He emphasized report data around culture: “Obviously the lateral market is hot right now, but the proper takeaway is that the firms generally considered ‘low turnover’ are holding steady while the firms already considered ‘high turnover’ are feeling all the heat. So you can’t chalk it all up to industry wide demand — there’s something going on that gives certain firms a transitory feel.”
Reuters reporter Karen Sloan echoed Patrice’s perspective: “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.”
Reuters reporter Jenna Greene agreed “… the report also offers some spot-on observations to support the notion that a paycheck is only one piece of the puzzle.” Her overall takeaway: “So yes, I think it’s safe to say that money is still important. The real question is how much it matters.”
In Corporate Secretary, Ben Maiden said the report showed “… attorneys ranked compensation behind clear opportunities for career growth, positive relationships with their co-workers and quality work when asked what would keep them from leaving their firms.”
Debra Cassens Weiss noted in ABA Journal that compensation is just one of many issues driving lawyer turnover: “But other factors also were important, including feeling underappreciated (30%), lack of progression (29%), and lack of genuine regard for their well-being (25%).”
In a second column, Patrice explored why tech-savvy firms are more likely to retain attorneys. He observed, “Generally speaking lawyers at Stay firms say they’re more likely ahead of the curve on technology and less likely to be behind it.” And he concluded: “Attorneys that feel more empowered to get the work done efficiently and without frustration are going to want to stay. … It’s a lot easier to keep working and perform that last triple-check when using your computer doesn’t feel like a root canal.”
Download the report to learn more about firms’ strategies to attract and retain lawyers.
