Recently, I was asked if I was going to fire an employee who made a mistake that cost the company $600,000. No, I replied, I just spent $600,000 training him. Why would I want somebody to hire his experience?                THOMAS J. WATSON SR.



How many lawyers have you watched move from one firm to another in the past year?  “The churn” as it has come to be known has become commonplace in the legal industry.

According to numerous reports, the average firm loses 20% of its associates per year.  And this is not a new phenomenon. This statistic seem to be relatively consistent for periods before and after the economic downturn and downsizing from 2007 to 2009.

The cost of the attrition, whether measured in terms of the bottom line or raw human drama, is extraordinary.  In term of dollars, on average, it costs law firms $200,000 plus to recruit, hire, train and replace the average associate. Compare this to the well run corporation, where turnover averages  2-3%.

The picture for partners isn’t any prettier. This article, by Michael Allen of Lateral Link, reports 2,000 to 3,000 lateral moves per year over the last 5 years. How successful have these moves been?  In short it is horribly unsuccessful. According to this post, a third of lateral partners leave their new home (for one reason or another) within three years. Almost half leave within five years.

The Reason For The Churn

There are a number of suggestions as to the root cause of such a high rate of attrition among law firms. These include:

  • The economy
  • Poor hiring practices
  • Overselling of individual value
  • Lawyers as managers
  • Overly aggressive recruiting from search firms

I’d like to suggest that something else is at play. (See next Tuesday for Part 2)