An unspoken, and certainly uncelebrated, aspect of the law firm associate personnel model is built-in attrition. "Built-in" can have two traditional meanings, and one new one:
- Traditional A: They wash out of their own accord, because of a variety of factors:
- they’ve paid off their student loans, and so the music for the dance they signed up for in their own minds has ended;
- ambitious as they thought they were for partnership, the hours are more than they bargained for (and partnership would only be more of the same–the famous "pie-eating contest where the reward is more pie");
- they basically like it, but find they don’t have true passion for it, and contrasted to those who do, they’ll lose;
- they realize that the years of key family formation coincide with the years to partnership and they choose the family track.
- Traditional B: They’re not cutting it and they’re excused.
- New Meaning: There has been zero attrition.
Welcome to the new reality of attrition. There isn’t any. I was recently talking with the Chair of a firm that would normally experience the departures of 30 or 40 associates over a typical six months. For the past six months? Zero: Not one. The concept of "built-in" attrition is suddenly broken.
So: What to do?
First, one can simply acknowledge, from an economic and a human perspective, that this is entirely understandable.
Warren Buffett likes to say that Aesop was a poor economist because the question of whether a bird in the hand is worth two in the bush depends on when the two will be delivered and what one’s discount rate is in the interim. But one thing we can say with certainty today is that a job in the hand is next to priceless. So much for starry-eyed visions of ditching the law firm to join the hedge fund or the private equity firm.
But the question remains: What are you going to do about it?
Logically, you can attack this with how you handle three pools of talent:
- Your investments in summer associate and first-year hiring;
- The level of your interest in the lateral associate market; and
- What you do about your incumbent (and non-attriting) associates.
Easiest is to alter your policy towards lateral associates: Go from choosy to hyper-picky. Only those with spectacular credentials in desperately needed practice areas get even a second look.
The intersection of summer and first-year hiring, and the ranks of your incumbents, is where it gets interesting. A rational view is that your 3rd through 6th years (say) are by and large known quantities, trained and raised in your firm to your standards and liking, and that excusing any of them in order to make room for fresh-faced question marks who are, not incidentally, very difficult to charge out to clients in this environment, is borderline lunatic behavior. You are demonstrating disloyalty to those who have survived at least the first few rounds of their 15-round bout, to make a largely uninformed bet on raw clay.
I beg to differ.
We’ve all read ad nauseum about the stunning virtues of just-in-time delivery in manufacturing supply-chain land. Our industry is the polar opposite.
Our "supply chain" (associate talent) is three to six to ten years long, depending on where you deem it reasonable to draw the start and finish lines. That is to say, it takes that span of years to take a human being from potential-lawyer-in-essence to actual, performing contributor to clients and the firm.
The relevance of this to today’s personnel challenge, I submit, is that you cannot introduce a gap into that supply chain. You need to be in the business of continually recruiting new talent, in order to feed the continually moving production line of senior to mid-level to junior staff needed to manage cases and transactions. You cannot, in other words, inflict on your own firm the equivalent of a "lost generation."
So counter-intuitive as it may seem, I recommend continuing to feed the associate pipeline from the start, summer associates and first-year hires, even at the cost of some mid-year enforced "attrition." Aside from what I believe to be sound long-term reasons to continue investing in the firm’s future in this way, there are as well both an abstract and a prudential argument for same.
The "abstract," or logical, reason to keep recruiting new talent is that some of it is bound to be better than your existing talent. It simply has to be the case. (If you think every single lawyer in your associate ranks is the best they could possibly be, stop reading now.) You may be satisfied with Bob 3rd-year or Emily 4th-year right now, but how do you know they’re as good as Dave 1st-year or Melanie summer associate will be at their level?
When I spoke about your "supply chain," I wasn’t speaking metaphorically. If clients are your demand, talent is your supply. Econ 101. Your "supply" (talent) is what you have to sell. You have few higher priorities than increasing the quality of that supply or, as a friend of mine likes to say, "enhancing the gene pool."
A prudential reason argues for the same continue-to-recruit policy: If your firm shuts down recruiting, be prepared for the market to have a long memory and for it to punish you when the good times return. (If you doubt this, recall that some firms were still suffering reputational dings for having laid off people after the dot-com meltdown half a dozen years later.)
Another reason to continue early-stage recruiting is the positive, optimistic, and confirming message it sends to your firm internally, to the marketplace, and to any other constituencies (potential clients?) whose opinion you value. Loud and clear, it says, "We are investing for the future, confident in the long-term value of our firm and what we provide to our clients."
Make no mistake about the power of this message in today’s environment, when century-old firms are imploding and, as Jay Zimmerman, Chair of Bingham, recently put it: "We’re starting to see a trend of people [changing] firms because they’re not confident in the vision their current firm has of the future."
Now is not the time, in other words, to shut down the processes that feed your talent pool. Now is not the time to act as anything other than a vibrant, going concern. Now is in fact the chance to upgrade the "gene pool."
No voluntary attrition? I’m sorry to report that your business model depends on attrition, and attrition there must be.
Unless you’d prefer to reinvent the model entirely, in which case: We can talk.
