By Laura Brown
BridgeTower Media Newswires
MINNEAPOLIS, MN — While national news has covered staffing crises as they have affected everyday consumers — highlighting stories of barren store shelves or CEOs having to flip burgers — little attention has been given to the staffing issues facing law firms, in particular Biglaw. And Biglaw is having to engage in unprecedented measures to secure staffing.
In September, a whopping 4.4 million Americans quit their jobs. In the category of employees that includes lawyers and other business professionals, 700,000 people quit their jobs in just two months, according to the Bureau of Labor Statistics. Biglaw was not immune.
The complaints about Biglaw have always been the same: too many hours, poor work-life balance, and the toll it all takes on physical and mental health. While the compensation is what attracts and retains top talent, even Biglaw attorneys have experienced the epiphanies others have of what is most important to them. While some have stayed, others have moved to boutique or midsize firms, or slid into other legal sectors all together.
All this taken together, Biglaw has scrambled to address a staffing crisis. And the way that is has handled it is to take the method that has served it well in practice: Throw money at the problem.
Things certainly started to heat up over the summer. In New York, some first-year associates are starting at over $200,000. That pressure pushed to the Midwest, including Minnesota. Not too long ago, the average first-year salary for an associate at a large law firm in the Twin Cities was around $120,000. That was eye-popping, but it was not enough to attract top law graduates who were willing to live in other markets where they could earn more.
Faegre Drinker Biddle & Reath raised first-year associate pay to $180,000 in June. Dorsey & Whitney boosted associate salaries in late September to $180,000. Effective Oct. 1, first-year associates at Robins Kaplan will start at $180,000 instead of $140,000. The firm is also offering a $100,000 bonus to former federal clerks.
“This move shows our commitment to recruiting the best associate candidates to join our firm,” said Ronald Schultz, chair of the Robins Kaplan’s Executive Board in a September release. “Attracting and retaining top talent is what enables our firm to maintain its track record of success and accomplishment for our clients.”
Biglaw firms are also expected to dole out enticing bonuses to retain talent. In the New York market, some senior associates can expect to take home $100,000 at the end of the year. It is not clear what Twin Cities Biglaw junior associates will receive around the holidays, but firms are under increasing pressure to keep pace with one another.
Some firms are even offering “referral bonuses” to associates who let firms know about attorneys at other firms who would be a great fit, or for incoming associates who lateral and bring a few friends with. The bonuses are at least several thousand dollars for each referral. The referral bonuses do save on headhunter fees and might lead to a better “fit” if the attorneys already have rapport. It also speaks to how competitive firms are for lateral talent, which has sometimes been considered an afterthought given that lateral salaries will be higher than for first-year associates. When the alternative is simply not meeting a deadline, firms have no choice but to pay more than they would like to get good talent in the door.
While “The Great Resignation” has affected the legal industry as a whole, it has affected certain demographics more than others. Specifically, it has affected women and lawyers from underrepresented communities.
Retaining women in Biglaw has always been challenging, given the mismatch between the demands of Biglaw and the demands of motherhood — which tends to fall on the shoulders of the mother due to societal expectations and common absence of non-gestational parent leave policies.
Before the pandemic, in 2019, the American Bar Association and ALM Intelligence released a report discussing why women were leaving Biglaw. Much of it boiled down to women being perceived as less committed to the career than male associates, or experiencing sexual harassment or sexism in the workplace. Things became amplified after the pandemic, where women’s child care responsibilities increased but many felt that they were subject to the same expectations as before.
The ABA released another report in 2021, “Practicing Law in the Pandemic and Moving Forward,” where it evaluated the effect of the pandemic on female attorneys in Biglaw. It found that more than a third of women are thinking that they will need to work part-time.
“The pandemic has influenced women, even more than has been usual, to consider whether to step back from or leave the profession,” said the ABA report.
For women attorneys with children who are age 5 or younger, the report finds that over half are considering going part-time. Shockingly, more than one-third surveyed consider that they will need to quit altogether. This is in line with the McKinsey & Company “Women in the Workplace 2021” findings, which promote an ominous picture of women in the corporate world. Experts have predicted a “she-cession” not just from Biglaw but across the board.
Help may be on the way, however. Law schools are anticipating another big year for admissions — even larger than 2021, which was the largest applicant pool of the past decade. The talent has also gotten better, with many law schools reporting an increase in LSAT scores by two points or more. There is not a single law school that has reported a decline in its median LSAT score.
And it has not been all doom and gloom for law firms despite staffing woes. Billable hours are up at some of the largest law firms, from 1,650 last year to 1,800 this year. That means revenue is up as well. Biglaw is on track to have a blockbuster fiscal year. For the top 50 largest firms in the country, revenue grew 16.5% in the first half of 2021, according to a Wells Fargo Private Bank survey in August.
Biglaw may be fine, and it will manage to be fine without changing its fundamental culture. For the promise of prestige and financial security, there will always be the next lawyer in line to take the job. The effects that the attrition has on Biglaw diversity — where significant recruitment efforts have been made in the past decade — remain to be seen.
