It has been estimated that lawyer turnover costs US law firms in excess of $13 billion per year — a staggering sum. At a more micro level the total cost of losing a lawyer is equal to more than two times the lawyer’s annual salary.
Although most industries face challenges associated with retaining talent, when it comes to managing the investments made in human resources, the legal profession’s performance is much worse than the norm. Turnover levels in US law firm’s often exceed 20% per year. Compare that to the Best Companies in America to work for, where turnover averages between 2 and 3%.
If your turnover exceeds 10% per year, you should be wondering why.
Here are four areas of management that you might want to take a look at.
Is your firm using all available tools to assess fit? Reportedly almost 90% of the Fortune 100 companies use psychometric assessments as part of their hiring process. By comparison, most law firm we know of adhere to the same hiring practices that were in place 50 years ago. If your due diligence consists of reviewing a resume or — worse yet — hiring based on proclamations of a portable book of business, you may have discovered the heart of your problem.
The existence of a clear path to self-development and professional growth is one of the keys to engaged colleagues. Firms that hire, invest 3 hours in “orientation” to processes and procedures, and then leave a new partner to sink or swim should not be surprised when there is little or no integration. Nor should you be shocked when talent winds up in an exit interview.
Do you know what the members of your organization really think about the firm? Do you know if they are content or discouraged? Often dissatisfaction is the defining fabric of an unproductive, unsettled workplace. And this environment gives rise to departures. Wise (and effective) firm leadership implements ways to listen, engage and respond to serious issues of dissatisfaction.
Whether you believe it or not, the professionals in your firm know when the economic performance bar is set low. If your firm consistently performs at or above industry norms, you have a much greater shot at having happy and satisfied colleagues. If this isn’t the case, evaluation and adjustment are in order. Fail to address this issue, and be prepared to deal with serious retention issues
Managing turnover is a choice; firms that accept high turnover are unnecessarily costing themselves dearly. Which choice is your firm making?