We’ve all heard about the Great Resignation by now, that post-COVID-19 adjustment where a substantial percentage of employees worldwide are expected to resign their current employers and find somewhere else to work. While not all countries will be affected in the same manner, or to the same extent, most will experience at least some of the effects of the Great Resignation.

A number of theories have been put forward for why the Great Resignation is occurring, including that employees have come to expect flexible working options and better working conditions and are prepared to vote with their feet, and that employees are seeking more meaning from their employment and are leaving when this does not eventuate.

Consequences of legal talent departing

Regardless of the reasons for these mass resignations that are already beginning, the question of how to retain their employees is top of mind for the management of law firms around the world. And it’s a question with particular significance when it comes to practicing lawyers (ie legal talent), because each resignation of a practicing lawyer has a two-fold effect on the bottom line of the law firm: 

1. the departure of the lawyer means that the law firm is no longer bringing in revenue from client billables – often 3 or 4 (or more) times the salary paid to the lawyer; and

2. the law firm potentially needs to pay a considerable percentage of the departed lawyer’s salary to find and recruit a replacement lawyer (itself a challenging feat these days due to the lack of options for law firms with so many trying to hire).

The impact on the law firm’s bottom line is not the only impact either. Staff morale may suffer if multiple resignations of lawyers occur in a short period of time, particularly where there is limited capacity in the law firm to pick up the work of the departed lawyer. 

This often sets off a “domino effect”, where lawyers who would not have otherwise resigned start looking around for a new role. This may lead to negative effects on the law firm’s culture (both internally due to views of staff and externally due to gossip in the industry), difficulties in maintaining client relationships, lack of capacity to properly service the law firm’s clients, limited capacity for business development and marketing, inability to properly supervise or train junior lawyers and graduates, reputational issues in the market, and so on. There is also the lost opportunity cost, as well as the loss of the investment that a law firm has made in the departing lawyer.

Law firms obviously need to minimise staff resignations

Needless to say, it is imperative that law firms minimise staff resignations (and particularly resignations of their legal talent) over the next few years. 

Making that statement is the easy part, however. It’s working out how they can keep their legal talent that is the hard part.

How can law firms retain their legal talent?

There are various schools of thought about how best to ensure retention of lawyers within a law firm. In my view, the law firms who are proactive about retaining their staff stand the best chance of surviving the Great Resignation relatively unscathed.

Often, the more conservative law firms around the world have a reactive approach when their lawyers resign. Commonly:

1. a lawyer resigns;

2. the law firm management has an immediate negative reaction (eg betrayal) and circles the wagons. This may result in poor communication, negative treatment of the lawyer who has resigned, and the other lawyers being made to feel that this will happen to them if they resign, which leads to resentment in the remaining lawyers – bringing about a self-fulfilling prophecy (as they too consider leaving);

3. the law firm tries to find a replacement lawyer (which may or not be possible given industry shortages of lawyers) or leaves the position vacant – in either case, there is an additional workload that must be picked up by the remaining lawyers;

4. morale suffers; and

5. the domino effect begins and other lawyers from that firm resign.

While it is, perhaps, human nature to approach the resignation of an employee in the above reactive manner, this is not the best course of action to take when facing down the likelihood of multiple employees resigning over the next few years. It is something worthy of a discussion between Partners and senior lawyers, and potentially some external training about how to react to a resignation in a manner which does not cause detriment to the firm.

So, if acting reactively to a resignation is not the right answer, what can be done?

Law firms should act proactively

In my view, law firms need to act proactively – from today – to maximise their chances of keeping their legal talent (and all other staff) over the next few years. Planning how to deal with the effects of the Great Resignation will allow a law firm to put in place a consistent approach in the event of multiple resignations. Even if “the Great Resignation” does not impact a law firm, there will inevitably be staff resignations over time, and this planning will put the law firm in a better place to respond to those resignations and more effectively manage the process.

If law firms do not start planning and taking action immediately, they risk any cultural problems within their organisation (particularly those affecting staff retention) compounding and growing. Additionally, change management – including cultural change management – takes time, and in my view, law firms need to be seen by their employees to be taking such change management seriously if they are to stave off the likely effects of the Great Resignation. To say this another way, those law firms who place a significant emphasis on their culture and measures to benefit their staff are more likely to retain a majority of their staff over the course of the Great Resignation.

How law firms can carry out change management

Rather than taking haphazard and random actions in reaction to specific staff resignations, I believe that all law firms should immediately put in place a program of change management with a view to positioning themselves in the best possible way over the next few years to avoid or minimise multiple staff resignations. A systematic approach should be taken towards this program of change management, and external experts should be consulted wherever necessary to ensure the program is multi-faceted and that actual positive change is achieved and sustained (and is well-received by their staff).

Unfortunately, it will not be as simple as throwing money – in the form of a pay rise for lawyers who seem to be making moves to resign – at the problem. Yes, pay rises are one part of the answer. But they are not the whole answer.

Any change management program will need to cover a number of areas, including: 

1. Financial incentives: Law firms may need to put in place financial incentives for legal talent who are engaged going forwards. This may be in the form of a higher or comparable pay amount when compared with national industry standards, a signing bonus , a yearly bonus, additional leave, and other potential financial incentives. And law firms shouldn’t forget consistent pay rises for their current staff – comparisons between staff will be inevitable.

2. Cultural improvements: It will be important for a law firm to put in place cultural improvements to ensure that its staff feel happy, valued and fulfilled (and are therefore less likely to want to resign). It is easy to gloss over the issue of culture in a law firm and hold to the belief that your law firm has a great culture. But management’s opinion about the culture of a law firm will always be different to the views of its staff. This is a particular case where it is important for external consultants to be engaged to assess the culture of the firm – employees generally will not speak freely with management (and even with “anonymous” surveys, there is always a doubt amongst staff that they are truly anonymous, meaning that staff may not speak as freely as they would to external, uninvolved people who want to help them improve the firm’s culture).

3. Employee flexibility: One of the biggest changes that has come about worldwide due to COVID-19 is the strong wish of many employees to work flexibly, both from home (location) and at different hours (time). This desire often conflicts with the views of management of a law firm, where traditional ways of working from the office may still be prioritised. Like it or not, I believe that this new dynamic of flexible working is here to stay, and law firms that refuse to offer new recruits the flexibility they ask for are likely to end up missing out on that recruitment. Additionally, existing staff may decide to resign and go somewhere that does allow for greater flexibility.

4. Updated policies: One of the things that staff take notice of, but rarely raise with management directly, is whether the law firm has policies and procedures that are consistent with industry standards. It is important that law firms identify and keep on top of these industry standards so that they can adjust their own policies as necessary. Particularly important, and topical today, are length of time of maternity leave, and the offering of a generous amount of paternity leave. A Flexible Working Policy that is reflective of new industry standards is also important.

5. Leadership “issues”: This is a difficult topic for the management of a law firm to discuss, but one of the most common reasons why legal talent resign from a law firm is because of problems with their direct supervisors. While personality clashes are the cause of some resignations, I believe that most of the problems between a supervisor and their junior come down to a lack of emotional intelligence training on the part of the supervisor. 

For law firms, as wishy washy as emotional intelligence sounds, it is critically important in ensuring that supervisors can interact in a calm and reassuring manner with those they supervise, give their juniors room to grow and develop, and show their lawyers that they are valued in their role. Emotional intelligence training will help supervisors to be more aware of the impact of their actions, attitude and approach on juniors. By improving how a supervisor interacts with their staff, a law firm will increase their chances of retaining those staff longer term. 

If the law firm implements such training at the same time as other change management actions, there is less likelihood of supervisors feeling singled out or targeted due to what they may see as an attack on their shortcomings.

6. Opportunities to play a significant role in matters: Most lawyers actively want to develop their legal skills and abilities. They feel valued and appreciated when they are given the opportunity to attend client meetings, call the client to discuss issues, and help run the matter. Consider having junior lawyers “shadow” their supervisors, to give them opportunities to grow and develop. Providing these type of opportunities to lawyers helps them feel like an important part of the law firm, and this helps to build their sense of loyalty (and increases the likelihood that they will stay at the firm for longer).

7. Secondment opportunities: Provision of desirable secondment opportunities with clients is often a way to attract legal talent. However, lawyers must feel that the secondment is a genuine training opportunity and not just a way of “shoving” the lawyer somewhere to keep them busy. In this respect, sending your lawyers on targeted secondments that suit their skills and abilities (or will teach them new skills/abilities) is a much better option than sending them to a client where they are simply a replaceable “bum on a seat”.

8. Meaningful opportunities: Lawyers these days are often far more conscious of using their skills and training for meaningful community or social outreach opportunities and pro bono work. Law firms which provide these opportunities may seen by legal talent as more desirable. If your law firm doesn’t have a formal pro bono program, why not entice the right legal talent by offering them the opportunity to set such a program up.

Practical training of staff

In addition to training of the supervisors as part of the change management program, law firms should also implement practical training programs for their lawyers and staff (both professional development and personal development). 

I particularly recommend training in practical skills, including:

• business development and marketing;

• how to write a tender to bid for client work;

• how to cost up a fee estimate;

• how to build client relationships;

• emotional intelligence;

• mental health care;

• how to negotiate;

• how to manage a matter from start to finish;

• how to draft a solid contract;

• how to deal with difficult clients and counterparties;

• the expectations on a junior lawyer (and how these change over their career); and

• how a junior lawyer can take charge of their own career.

As you will see, most of these topics are not commonly taught by law firms – but these are the things that lawyers need to know. And learning about these matters helps lawyers to feel that they can make a greater contribution to the firm, that the firm is placing emphasis on their training, and that they are valued by the firm. This in turn increases the likelihood that they will stay for longer at the firm. 

Such training programs will also help law firms to differentiate themselves from other law firms and attract quality employees during the Great Resignation.

Mentoring and coaching programs

Not all lawyers will want this, but mentoring and coaching programs should be made available for them should they wish. At a minimum, the law firm could encourage its lawyers to develop a mentoring relationship with a senior lawyer they trust and respect. Some law firms may assign mentors, but from experience these assigned “relationships” are often not as effective as those mentoring relationships that develop naturally. Paid mentoring from an external consultant is also a good option, and often well-received by lawyers. 

Coaching is usually undertaken by external consultants and may be reserved for the higher performers or as an added inducement when engaging a lawyer to join the firm. This is an effective way for the law firm to differentiate itself from its hiring competitors. 

Summary

The effects of the Great Resignation are likely to be felt for many years, but those law firms who are proactive and who take a hard look inwards are likely to have a better chance of keeping their staff and/or attracting new staff to the law firm. 

By implementing a comprehensive change management program, and by providing practical skills training and mentoring and coaching to their lawyers, law firms will set themselves apart from their competitors and become a more desirable place for their lawyers and staff to work. This will help both to retain lawyers and staff and give those law firms a means of differentiating themselves from the dozens of other law firms who are trying to recruit from the same limited pool of potential employees.

Contact Rachelle Hare on rachelle.hare@blazelegal.com.au to discuss implementation of a change management program like the one mentioned above, targeted to your law firm’s specific needs and the requirements of your lawyers and staff. Rachelle can also deliver a comprehensive practical training program for your lawyers/staff. Additionally, Rachelle is available for mentoring and coaching of the lawyers and the management of your law firm and general management consultancy services (including working with recruiters on your law firm’s behalf to ensure the best chances of success in recruiting new legal talent).