Yesterday, we wrote about the booming legal market described in the 2022 Report on the State of the Legal Market by Thomson Reuters Institute and the Georgetown University Law Center on Ethics and the Legal Profession. Beyond the return of real growth in demand for legal services and continued profitability, the report featured some unique findings relevant to the frenetic lateral market.
As the earlier story discussed, some firms will eventually hit a wall when it comes to skyrocketing compensation. When that happens, how will they respond to stay competitive in the battle for the finite pool of talent out there?
The State of the Legal Market report pulled back the curtain a bit on the other side of the lateral question: retention.
All of these efforts are important and necessary, but they are likely not sufficient to bend the curve on the rising turnover rate that law firms are experiencing. Achieving that goal will require firms to reimagine their structures and operations in the post-pandemic world to provide the real “glue” that we know is necessary to bind people to organizations — feelings of value and meaning in their work, feeling appreciated and recognized, having opportunities for growth and personal satisfaction, and believing that they are making a contribution to something larger than themselves.
The best offense may be a good defense when it comes to laterals. The Thomson Reuters Institute promises more on this issue in the coming months, but armed with preliminary data, the current report includes this graphic:
There’s a lot to unpack here, and I’m a little hesitant to draw too many conclusions until the later report provides all the data, but…
These factors should not be taken as a suggestion that lawyers are happy staying at firms that work them harder and pay them less.
And yet, that’s very much what you’re suggesting!
Again, everyone should reserve judgment until the more complete inquiry comes out and we can piece together the nuances driving these figures (I’d particularly be interested in digging beyond using just the mean billables number), but this is a bit of a jolt to the conventional wisdom. Maybe there really is an appetite for firm culture perks beyond straight cash?
I dunno… loans don’t get repaid with weekly wine and cheese parties.
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.