Although many businesses struggle to find and keep the right talent, few fields face the staggering turnover costs suffered by the legal industry.
According to a recent white paper released by The Right Profile, the largest 400 firms in the United States alone sustain more than $9.1 billion annually in attorney turnover costs, and that number swells to more than $13 billion when turnover at firms of 50 to 100 attorneys is included.
That same report, based on an online attorney trait study, also suggests that law firms can significantly reduce turnover costs by using a hiring assessment and focusing on practice area and cultural fit.
At the heart of the issue is the attorney hiring process itself, which has changed little for law firms and lawyers over the past thirty years, according to the findings.
High law firm turnover, caused in large part by hiring decisions based upon little more than the law school attended, grades in school, a short unstructured interview process and, in the case of lateral attorneys, an uncorroborated book of business, combined with high recruiting and replacement costs creates a staggering financial toll and undue disruption for the firm’s clients and its lawyers.
“At its core, the answer to lower overall law firm hiring costs is simple – hire better, develop your people and put them in roles where they will have the best chance to succeed, and, as a result, keep the most desirable people longer,” states Mark Levin, General Counsel for The Right Profile. “Our study shows that attorneys and firms can find a better mutual ‘fit’ by using an assessment; certain trait patterns fit better in certain work settings, specific firm cultures and various practice areas. Understand those key traits and attorney satisfaction levels, and you have a way of finding a long-term member of your firm.”
Although roughly 80 percent of the Fortune 500 and 89 percent of the Fortune 100 companies use psychometric assessments in their hiring process, less than five percent of the Am Law 250 law firms currently use assessments during the hiring process, and none uses instruments purpose-built for the legal profession.
“I am amazed at how slow law firms are to change,” Levin continued. “I would bet that every law firm with more than 50 attorneys has multiple clients using assessments in their hiring processes, and that many of these law firms have even counseled their clients on how to set up effective programs. So how are they missing this?”
The importance of talent at law firms cannot be overstated — it is the “supply” of what is “sold” to meet client demands.
A firm’s talent is synonymous with its quality and capabilities; they are not selling a product or service that can be produced by a fungible group of people. In Levin’s opinion, the revolution starts with a few simple steps:
“Forward thinking law firms will look beyond the hiring metrics that they have always used to new information and data that can help them attract better talent and lower their costs - filling their ranks with attorneys that fit better culturally and matching those attorneys to practice groups, mentoring, cross-selling and attorney development programs that best fit with each individual lawyer’s characteristics and interests.”
The Right Profile has published a full white paper discussing the findings and implications of the study. The full text of the publication, Assessing Lawyer Traits & Finding a Fit for Success, is available at http://www.therightprofile.com/law-firms.
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