Should I stay or should I go? The importance of purpose during the Great Transition
Lawyers need a reason beyond money to care about what they do if their firm wants to avoid being a victim of the Great Resignation, writes Dentons' Joe Andrew
More lawyers will leave their law firms and join another this year than any other in the history of the profession. This simple but startling fact will change the profession in ways that we can only begin to understand all around the world.
But viewing these changes through the prism of what media headlines call the 'Great Resignation' obscures a more important dynamic. The whole picture is about a Great Transition, with people of varying backgrounds, places and circumstances looking for something different than what they have now. Those who are quitting are finding new jobs they perceive as more attractive. This Great Transition is a key attribute of the New Dynamic, an environment shaped by constant and rapidly increasing change where there will never be a new normal.
It is no secret that lawyers tend to be unhappy in their jobs – and have been for some time. As one example, according to a nationwide survey in 2013 law firm associates had the lowest job satisfaction in the country – lower than teachers, nurses, real estate agents, used car salesmen and even lower than the legal assistants who supported them.
But those who are in leadership in law firms understand that job satisfaction, despite increases in compensation, has gotten worse in the past nine years. It is clear that every trend related to lawyers’ desire for a better work-life balance and purpose-driven work that was obvious before the pandemic has accelerated. Workplace changes that people hoped for in 2013 have today become table stakes – and the turnover still continues.
Every law firm is in the midst of a 'war for talent'. More lawyers in more places are considering changing positions, or even leaving the legal profession. A recent Georgetown University/Thomson Reuters Institute report that revealed turnover rates among associates in the AmLaw 100 reached 23.2% in 2021. This is a 24% increase over pre-pandemic turnover rates and higher than the increases experienced in sectors such as education and healthcare, arts and entertainment, and business professionals. And this was despite salary and bonus increases of more than 15% for associates in 2021 compared to just 2% in 2020.
The report also compared 'stay' firms (the 25% of AmLaw 100 firms with the lowest turnover rates) to 'go' firms (the 25% with the highest turnover rates). Stay firm lawyers actually billed 51 more hours per year than their go counterparts. Yet associate salary increases at stay firms averaged 9.8% in 2021 while the increases at go firms were 11.4%. Clearly, something other than compensation competition is in play when it comes to retaining talent.
Lawyers may be uniquely unhappy, but they are not unique in their desire for more purpose-driven work
The more effective way to retain talent is to focus on culture as well as compensation. Law firms have one distinct advantage over other businesses that is often either ignored or forgotten by big law: we are a profession first and a business second. Those law firms that focus on what it means to be a member of a purpose-driven profession, with ethical standards and a commitment to delivering justice, will be the ones that succeed in this new dynamic.
Lawyers may be uniquely unhappy, but they are not unique in their desire for more purpose-driven work. A recent multi-region McKinsey survey of managers and workers reveals that there is a significant disconnect between how management and employees view this new dynamic. Managers perceive workers’ desire for more money, recruiting by competitors, greater development opportunities, health complications and the desire to work remotely all as more important factors in the decision to change jobs than workers do. Workers say their departures are more influenced by whether they are valued by the organisation and have a sense of purpose, caring and trusting colleagues and a flexible schedule at work.
Making decisions in the name of seeking justice rather than just profits reminds us why we do what we do, even as we represent clients whose principal goal is to make money. In addition, it is crucial to remember that most of the people in a law firm do not benefit as directly as partners if the law firm is more profitable. A law firm has to convey to all of its team members a sense of purpose that goes beyond financial gain. When done successfully, making more money is likely to be the byproduct.
The first steps must be to make lawyers and other team members feel valued, to provide a supportive, trusting environment and to give people a reason to care about the work they do. By doing so, what is only the Great Resignation for most firms can become the Great Transition for your firm.
Joe Andrew is the global chairman of Dentons