White Papers | Incorporate Greater Flexibility to Retain Law Firm Associates
It's great to see that the Wall Street Journal has introduced a column devoted specifically to the business and management challenges of law firms. Titled "The FLaw" and written by Ashby Jones, the new column will particularly emphasize the miscues, peculiarities and strange customs of law firms.
The first installment takes aim at the problem of holding onto young talent. At Rafte & Company, we expect the issue of improving morale and retention of associates at law firms will become a priority for partners in 2006. Further, we anticipate that successful firms will look for ways to utilize technology investments and changes in workflow processes to incorporate greater flexibility for their personnel.
Why go to all this trouble?
According to a study by the NALP Foundation, a group that examines law firm hiring trends and practices, 37 percent of associates at law firms that employ more than 500 lawyers quit their firms by the end of their third years of practice.
That data point might not seem unusual or alarming, until, as columnist Jones points out, you consider another study. Altman Weil, Inc., a Pennsylvania-based consultant to law firms, released a study in 2003 that reveals how truly disastrous this rate of attrition of associates can be for law firms. That study determined the average big law firm doesn't start recouping its cash flow investment in an associate until AFTER an associate's third year. In fact it's not until about midway through an associate's fourth year that most associates start acquiring the skill and confidence to run their own cases and deals -- and begin delivering true value to the firm.
The Wall Street Journal piece boils it down to the following challenge: How can law firms retain more attorneys into their fifth year and beyond?
The answer lies in providing attorneys with the opportunity to dictate more of the terms of their employment – to free them from the billable hour ball and chain.
Of course, it’s not that simple. Numerous factors complicate the retention of associates during the third year of practice. Many firms subtly begin to demand more from associates during that time. It's a period when associates feel pressure to decide whether they will be on the partner track and how they will increase business development activities in hope of building their own client base. Simultaneously, recruiters are often less subtle, suggesting that associates need to get out before they are no longer marketable. However, the Wall Street Journal suggests that the culture in many large firms also prompts many associates to jump ship when they see that many partners hate their overworked and stressed out lives.
Female associates pose their own unique challenges. According to the Association of the Bar of the City of New York, in 2004 women constituted nearly 50 percent of law school students, but they made up only 15.6 percent of partners at major New York City law firms. One aspect of the problem is the stress and strain many women attorneys experience trying to juggle the demands of the legal profession, the responsibilities of family life, and personal interests.
But law firms can do a better job of retaining associates and, in the process, maximize the productivity of their workforce by making it possible for their people to achieve the lifestyle they want. While this is of particular importance to Generation X, it applies to anybody who needs the ability to be productive in an office without walls, including senior associates and partners who want to work toward a partial retirement status.
I recently went to lunch with two partners of a firm who are both approaching retirement age and expressed that they would like the opportunity to retire in the not-too-distant future. I was taken aback when they expressed that retirement had to be an either/or proposition. They felt the need to be in the office full time or call it quits; there was no middle ground.
When I probed, it became clear that one of the main reasons they felt this way was they didn’t think it was right to ask the firm to provide a secretary for each of them to facilitate their work if they were only going to be 30 to 50 percent billable.
“Why would each of you need to have a dedicated secretary?” I asked.
“That’s the way it is now because we all have different ways of getting our work done,” they replied.
Therein lies the true challenge for many law firms.
In concept, there wouldn’t be a problem with accessing the firm’s data remotely. They have all the technology necessary. But the way they work – their workflow process – lacks the necessary standardization. At many firms, their attorneys continue to store their work in discrete paper files. E-mails are not routinely archived and are stored in an attorney’s personal in-box rather than in a central repository. Some secretaries have their own peculiar ways of organizing files that are a mystery to everyone else.
As a result, these firms can’t leverage their personnel because there are no standards. If they were to examine and standardize their workflow process, any administrative staff can be mobilized to do any administrative task for any attorney. In essence, we create a work environment resembling Lego bricks that can be built, torn down and restructured at any time to meet any work-related challenge.
This is what leverage is all about: possibility.
When you get into rigid situations, people make choices. Recognizing that studies have found that Generation X, as well as mid-career women and partners nearing retirement are attracted to work environments with greater flexibility, savvy law firms are exploring how to make that possible.
In our next article, “Enabling a Flexible Work Environment in Your Law Firm,” we will examine how you can make an alternative work environment possible through technology and workflow standardization.
