What makes lawyers stay (and leave) law firms?

As law firm leaders seek to retain their best talent, the development and wellbeing of junior lawyers is just one element of a complex HR challenge, write Michael Legg, Felicity Bell and Vicki McNamara.

In short:

• This article explains that quality of work and professional development are key elements to address if law firms want to retain top talent.
• Transparency around how lawyers are assessed and promoted fosters employee trust.
• Firm culture is foundational and essential for retention; often more so than remuneration levels.

Talent is central to any organisation’s success.

For people-based organisations such as law firms, this is especially the case. Talented lawyers are key to attracting and effectively serving clients, which are the source of revenue. Today’s junior lawyers are also the pipeline of future partners that will allow the firm to continue and grow.

We consider that there are five key factors that young lawyers focus on in determining if they want to stay with a law firm, or leave. Those factors are:

1. Compensation – junior lawyers want to be paid at a level commensurate with their experience and skills. In their early years, this is likely to be roughly the same amount across the commercial law firm sector as lawyers are still learning and developing. It is difficult to justify a salary that is different from the average. As lawyers start to get more experience and move closer to or become senior associates, then top performers can be identified and will expect to be appropriately remunerated.
2. Professional development – new lawyers need to obtain technical and practice-related expertise, such as researching, drafting and communicating, but also black-letter law knowledge. Junior lawyers are also likely to expect training and opportunities to develop ‘soft skills’ and networking opportunities within their firm and in relation to clients.  
3. Quality of work – this is important to junior lawyers because it links to their own professional development and their motivation to work hard. Are they gaining skills and seeing novel issues? Is the work meaningful and satisfying?  As quality of work likely also has a significant impact on future opportunities, compensation and promotion, it has both intrinsic and extrinsic value for newer lawyers.
4. Transparency – everyone wants to know what they are being assessed on and how they progress. Newer lawyers are no different; they want to know what is measured and rewarded. Is the focus only on billables, or is account taken of internal referrals, collaboration and service to the community? But lawyers rising through the ranks also want transparency on their future. Is the firm committed to them long term and seeing them as a future partner? Is everyone able to get clarity on what they need to achieve to make promotion a reality?
5. Firm culture – there are many aspects of culture, but young lawyers tend to focus on how people are treated within the firm and how the firm relates to its community and society. A firm that prides itself on diversity and equality so that everyone, within and outside the firm, is encouraged to be ‘themselves’ and treated with respect, is likely to be an attractive place to work. A firm or practice group with bullying, discrimination and harassment is not.

In pursuit of better retention

Most law firms are clear on the five factors, but the difficulty is delivering on each of them.  In addition, there may be differences between firms as to how diligently they pursue each of the five.

Most firms desire to meet the first three, though this takes effort (and law firm partners are busy people). Often the best way to address these first three – compensation, professional development and quality of work – is to build a process. Large law firms have the resources to do this. They can devise performance evaluation tools that utilise key performance indicators to set compensation, and they can also incorporate recording of matters worked on, types of work undertaken and training completed. Indeed, all these measures are usually part of the information recorded on timesheets and can be monitored against a capability framework and included in an employee development plan.

Partner or senior lawyer input is, however, still needed to address qualitative factors.  

Was the research or drafting of an appropriate level? Did the junior lawyer participate in the client meeting, or just take notes? But perhaps more important are the real-time interactions where senior lawyers offer feedback to juniors on a task well done or suggest some ways to improve.

A minimalist approach to supervision (where the lawyer is given too much responsibility without adequate support) is likely to be just as damaging (if not more so) than a micro-managing approach (where the lawyer’s work is heavily controlled and supervised). Both extremes can lead to dissatisfaction and stress.

On the other hand, transparency is the one area where law firms may be more hesitant about meeting young lawyers’ expectations. This is part of the way firms function. A law firm needs many more junior lawyers than partners. A lawyer who stays and contributes to firm profitability is a great asset, but they may not be the person who the firm wants as a future partner. This may be because that lawyer does not have a business case – the necessary future clients and work to support promotion. But the firm does not want that person to leave too early.

Equally, the firm may not yet be able to assess which of its junior lawyers is going to ultimately become a partner as the partnership tournament has not yet played out sufficiently. Although drivers of success like mentoring, exposure to important clients and skills development will be a good guide, firms also need to consider how these markers are being achieved. Are all lawyers being given opportunities for exposure to clients or to ‘quality’ work? Are some lawyers benefiting from mentoring or sponsorship from which others are excluded? Transparency on these factors might also assist firms to diagnose diversity issues in the firm.

Complete transparency could see lawyers lost too soon, which undermines profits. Equally, however, the firm that does not provide transparency may lose the lawyers they want to keep. There is a connection to broader culture and values here. Respect needs honesty. Firms require honesty from their lawyers to diagnose issues and fix problems, and lawyers are entitled to honesty in return.  

Finally, culture is a difficult area because it requires effort from everyone, yet culture is also the air we breathe – often, we are so immersed in it, we are not even aware of it. Moreover, the other factors all contribute to and are informed by the firm’s culture. Culture is about values and how a law firm conducts itself but, importantly, culture is not just a firm issue. Culture is primarily experienced at the team level, meaning that individual partners and other senior leaders play an important role in delivering on values. Values can be proclaimed on firm websites, but it is the culture that junior lawyers experience that really matters to them.

Supervision role crucial

Using the example of supervision, above, a firm may say that it offers excellent supervision and training to new lawyers. But this requires those supervising to have the time, competence and motivations to be good and ethical in that role. Does the firm prioritise that, for example, through training its senior lawyers in allocating work and providing feedback? Do they receive any recognition for their own efforts as mentors or for contributing to another’s development? Are they so overworked that they do not feel they have time to properly delegate and supervise work?

As a result, values such as diversity and inclusion, respect, collaboration and excellence, to pick some common values that law firms espouse, need to be lived. As the Black Solicitors Network in the UK has observed in the context of diversity, firms have become adept at ‘talking the talk’, but many continue to struggle when it comes to ‘walking the walk’. As a profession with ethical responsibilities, it is also important that culture includes observance of ethical obligations. Culture, although hard to define, is extremely important to retaining lawyers – even more so than compensation.  

The leadership imperative

Central to a law firm delivering on the five factors is leadership by the partnership at the firm level and by individual partners at the team level. Law firm leaders need to take responsibility for recruiting and retaining talented lawyers. Leadership means demonstrating to lawyers that their development and wellbeing is a priority. It is also about explaining the need for ethical conduct and for high-quality service to the client. Lawyers must achieve both. Newer lawyers need to comprehend the short- and long-term drivers of law firm success, and where they fit in. 

While the above discussion has focussed on what junior lawyers want and how law firms respond, it is important that junior lawyers take responsibility for their own careers, including personal development and planning for the future. Junior lawyers need to seek out skills development and the work that they want. Not in an obnoxious way, but in an honest, respectful manner. 

Lastly, it has to be remembered that some people will always leave. Other experiences, whether it be overseas work, postgraduate study or trying a different type of legal work (a corporate or government role) or different work altogether, will always have an allure. Goals may change, and other priorities arise.

Rather than fight this, law firms need to accept it, and focus on the person being able to leave ‘well’ – in a manner that does the least harm to relationships. The person that leaves may return – with an array of experiences and ideas. The person that leaves may be a future client, or at the very least someone who will hopefully speak highly of their experience with the firm.

Can there be a better endorsement than a past employee who says that the firm had a great culture and valued its people?

Professor Michael Legg is the Director of the Centre for the Future of the Legal Profession (CFLP) at the University of New South Wales Faculty of Law & Justice (UNSW).  He is admitted to practice in NSW and New York and has over 25 years’ experience in private practice, chiefly in class actions and regulatory litigation with major Australian and US law firms.

Dr Felicity Bell is the Deputy Director of CFLP and Senior Lecturer at UNSW. In addition to working as an academic, she has previously worked as a solicitor in private practice and most recently as a specialist legal advisor for state government.

Vicki McNamara is the Senior Research Associate with CFLP. Before joining CFLP, she was a practising lawyer and knowledge management and legal technology leader with more than 30 years’ experience in global and national law firms and in-house legal teams, including Herbert Smith Freehills, Woolworths Group and Maddocks.

CFLP’s research and education activities are available here: https://www.unsw.edu.au/research/centre-future-legal-profession