For each law firm that participates in our annual interview-based research, we also invite its junior staff to participate in an online survey that covers all aspects of the law firm`s life. They answer 40 questions by asking everything from their initial views on the company and its competitors, to their relationships with partners and customers, to how the company deals with D&I and pro bono. We also ask them about their expectations, aspirations and the importance of all these factors when they entered the profession and how these views are changing with increasing maturity. Each question includes an evaluation, which we aggregate here for comparison purposes. Retention scores are a combination of all topics that can affect company loyalty, such as: Job acquisition and practice reinforcement, partner mentoring and customer contact, quality of case experiences, D&I policy that influences progress upwards, pro bono work that develops skills. So, our advice: Don`t draw conclusions about a company from a single metric in a single year. Turnover rates are just one of many useful data points when considering a potential lateral target. The answer to declining staff turnover may not lie in the benefits. Money isn`t the only thing young employees consider. Instead, the roots of fluctuation can lie in a company`s existing corporate culture. And that`s the mystery. Corporate culture has often evolved over time and success, taking with it a sense of tradition that can be valuable. A change in this culture, especially in large companies, should be done strategically and with complete introspection.
• There is a wide range between the turnover rates of the 25% of law firms with the highest turnover (so-called “go” firms) and the 25% of law firms with the lowest turnover (so-called “stay” firms). Until November 2021, stay companies had an annual turnover rate of 8.7%, compared to 18.4% for Go companies. The results were unexpected. Firms with the lowest revenues had employees who worked longer in the past year and experienced lower earnings growth than those with the highest incomes. What should someone considering joining a new company learn from the data? Of course, you want to investigate the cause of wear and tear. A lower-than-average turnover rate may be a sign of employee satisfaction with their business, but could also reflect employees` increasing difficulties in finding new jobs (e.g., litigation lawyers are much less in demand for their services with other companies). An above-average turnover rate may be a sign of employee dissatisfaction with their company, or it may be an indication that ambitious employees have been able to use their platform to find new opportunities – to go internally or join a company with better opportunities for advancement. On the ball: The Major League Baseball trade deadline may have passed, but teams are still adding new talent from the legal department.
Brian Baxter reports that the New York Mets have promoted two in-house attorneys to co-general counsel to replace David Cohen, the former chief legal officer who left after a workplace culture scandal. Brian also announced this week the news of new leading lawyers for the Philadelphia Phillies and Pittsburgh Pirates. Either way, the turnover comes at a time when many law firms are experiencing an increase in corporate work. Cravath ranked 4th for deal value in a record half of the year for closing deals, according to data compiled by Bloomberg. Rarely before have companies had to deal with such dizzying sales. In the high-end, two companies had a turnover of more than 50% of their New York employees. 11 companies achieved a turnover of more than 40%. Only five BigLaw firms had less than 20% revenue in New York and only 30 firms had less than 30% revenue. The study, released Thursday, follows record sales from law firms and a pay race that has pushed salaries for new hires to $215,000 in recent months. Employee turnover rates at AmLaw 100 companies reached nearly 25 percent last year, up from about 19 percent in 2019, according to a report by Georgetown University and the Thomson Reuters Institute written by Jones.
• Law firm turnover reached 23.2% on a 12-month mobile basis in November 2021. This is well above the rate of 18.7% in 2019, the year before the pandemic. For Am Law 100 companies, the turnover rate was 23.7% until November 2021. The increase in sales came despite salary and bonus increases of more than 15 percent at AmLaw 100 companies, according to the report. Welcome back to the Big Law Business column on the evolution of the legal market written by me, Roy Strom. Today, we look at how turnover rates have increased and what the long-term problem is for major laws. Sign up to receive this column in your inbox on Thursday morning. While it may be suspected that increasing benefits, offering better pay, and reducing billable hours would help retain employees, the evidence shows otherwise. According to the Association of Legal Administrators` 2017 Compensation and Benefits Survey, staff turnover has still risen sharply despite an increase in benefits and benefits, an average salary jump of nine percent, and an average premium increase of 30 percent in 2017, with a 28 percent increase from 2016. With staff turnover rates reaching record levels, law firms need to go even further by providing the kind of glue that binds people to organizations, according to the 2022 State of the Legal Market Report: A Difficult Path to Recovery. I didn`t expect to hear these words as I talked about Big Law`s best fiscal year in over a decade.
Billing rates have risen and sales and profits have likely reached record levels. These calculations are quite simple with an annualized turnover of 25%. If this 25% rate continues over five years, law firms will return their entire first year at the end of this period. Note on data: We calculated turnover rates as the number of employees leaving a company in 2021 as a percentage of all associates at the beginning of 2021. We didn`t include lawyers going on articling (as they usually return to their firm afterwards): however, in the midst of this upheaval, some firms have been more successful in retaining their employees than others. Here are the 10 companies with the lowest turnover rates in New York City: Analysts say the level of turnover in the workplace shapes the legal industry, with one saying the level of dissatisfaction and disconnection that motivates them seems “almost unmanageable.” Statistics show that the top 400 law firms lose about $9.1 billion a year through their revenues. The loss of lawyers in large numbers endangers the morale of the firm, disrupts the firm`s culture, damages the reputation of a law firm, angers clients and means that hundreds of hours of training and teaching have gone up in smoke. What is the key to managing turnover in law firms? A number of factors, some of which are not always what companies expect. In these cases, frustration sets in and prompts employees to look for other, more fulfilling opportunities.
The turnover of young lawyers in law firms is at an all-time high and the flow of outgoing talent has not been contained. the rate at which they send employees internally and to the government; and the researchers looked at a representative sample of more than 160 mid-sized companies and the most profitable U.S. law firms, grouping them according to the pool of lawyers between 2019 and 2021. Companies with turnover rates in the richest 25%, which averaged more than 19% in 2021, were called “go companies”. Those in the bottom 25% for turnover, with an average turnover of just over 6% last year, have been called “stay companies”. So, about this turnover rate – it was 26% in 2021, which was 16% in 2020. Yes, that`s a pretty striking difference. In fact, this is the highest turnover rate recorded in the history of the survey, which began in 2006.
Employees of color left their law firms even more frequently, with a turnover rate of 34 percent last year, up from 18 percent in 2020. But right now, I see little evidence that attrition is driven by the big employees of the law moving away from an exhausting industry. It seems that amid a historic increase in demand for in-house lawyers, some companies are doing better financially and doing a better job of recruiting. The Georgetown/Thomson Reuters Institute report included a comparison between low-revenue companies (on average less than 9% for all lawyers) and those with a high turnover rate (more than 18%). Where have all these employees gone? They did not leave the profession or went home, but moved on to other companies.