This is the third in our series of posts about The Great Resignation and its effects on the legal market. In our first post, The Great Resignation: A Wakeup Call for Canadian Law Firms, we outlined the causes and consequences and offered several responses. In our second post, 5 Surprising Findings About Costly Lawyer Turnover, we highlighted new research that showed not all firms are struggling with lawyer churn – and why.
In this post, we offer a roundup of the latest research on the lateral moves that are challenging legal firms worldwide. You’ll find links to all the source articles (plus a bonus article on our most popular blog topic – legal writing) on our Scoop.it page here.
Law firm profitability ‘dropped markedly’ in first quarter
Law firm profitability has been shrinking, even as the demand for legal services grows. According to the Thomson Reuters Law Firm Financial Index, direct expenses increased 13.1% in the first quarter of this year.
Higher associate salaries are the most obvious culprit, as firms continue to battle for talent in the wake of the Great Resignation. Firms can offset the profit squeeze by applying technologies such as document automation that reduce costs and enable associates to focus on high-value work.
More than half of lawyers under 40 plan to leave in the next five years
A new survey from the International Bar Association revealed that 54 percent of lawyers under 40 said they were “somewhat likely” or “highly likely” to move to a new workplace in the next five years.
For every lawyer that leaves, a firm will pay $400,000 to $800,000 in recruiting, onboarding, training, and lost productivity costs. So, what’s a firm to do to avoid the steep cost of employee churn? Perhaps a clue lies in one of the other survey responses: 40 percent of respondents see legal technology training as critical for their future. This suggests that now is the time for firms to implement technologies that can help attract and retain talent.
5 Surprising Findings About Costly Lawyer Turnover
If you missed our recent blog post, here’s a summary. We covered key highlights from a Thomson Reuters – Georgetown University study on law firms’ competition for talent. One of the more surprising findings: lawyers at firms with low turnover are getting paid less and are working more. One possible explanation: these lawyers identify as innovators and early adopters of technology. Perhaps, technology that makes a lawyer’s work easier provides a reason to stay.
Bonus Topic: Need to sharpen your legal writing?
Judge Robert E. Bacharach of the 10th U.S. Circuit Court of Appeals has written a book of research results and tips on legal writing. It combines his experience on the bench with research on the art and science of written communication. This topic continues to draw new visitors to our blog every month (see “The Dangers of Bad Legal Writing” and its sequels). Errors in legal documents can have unintended and sometimes dire consequences. Document automation can reduce or eliminate these errors while lowering costs.
About Michael Sauber
Michael Sauber leads the marketing program for Korbitec, producer of Automated Civil Litigation Software (ACL) and xchangedocs. He has worked with document production technologies and professional services for over 30 years and is a frequent blogger on these topics.