Nov 3, 2021

The Great Resignation: A Wakeup Call for Canadian Law Firms

The Great ResignationAs the pandemic winds down and offices reopen, law firms could be in for a surprise. Employees invited to return to the office may have other plans. In a phenomenon dubbed “The Great Resignation”, workers are pursuing jobs that are a better fit with their desired lifestyles and values. To deal with this attitude shift, firms need to reconsider how they attract new talent, and how they keep the staff they have.

An Issue of Supply and Demand?

Demand for legal services is rising and firms are scrambling to attract and retain associates to handle the load. In the U.S., firms desperate for talent are reaching across the border and hiring Canadian lawyers, raising the pressure on Canadian firms to keep up with newfound business.

“Renewed business confidence is boosting hiring activity in professional industries across Canada, and the need for skilled workers is at an all-time high,” said David King, Canadian senior district president of Robert Half.

In this competitive market, employees hold the upper hand, and many are rethinking their relationship to work. In a Microsoft report entitled The Next Great Disruption Is Hybrid Work – Are We Ready, 54% of GenZ workers and 41% of the entire global workforce are considering resigning from their current jobs.

The “war for talent has become much more fierce,” said Deborah Bottineau, district director at Robert Half Canada. “People are leaving for a number of reasons, including flexibility, better compensation, opportunities for professional development and employers whose values align with their own, including around diversity and inclusion.”

And the issue may be more than just short-term. In a Wall Street Journal article last summer, 22 of 52 economists surveyed said that labor participation “would never return to its pre-pandemic level.”

The Consequences

A shortage of staff may cause firms to pass up matters they might otherwise have pursued. But the economic consequences of the Great Resignation run deeper.

According to employee retention consultant Retensa, when a lawyer leaves a firm, “the cost to the firm ranges from $400,000 to more than $800,000”. Josh Bersin of Deloitte cites several factors that contribute to these costs, including:

  • Recruiting costs such as advertising, interviewing, screening, and hiring
  • Onboarding costs, including initial training and management oversight
  • Lost productivity during a new employee’s ramp-up
  • Errors due to inexperience
  • Training costs – typically, 10-20% of an employee’s salary over two to three years

Turnover costs the legal industry $9.1 billion annually in the 400 largest U.S. firms alone, according to Retensa. They also say, “in the last three years, Big-Law firms experienced a 61% decline in revenue, 83% decline in revenue-per-lawyer, 85% decline in profit-per-lawyer, and 67% decline in profit per equity partner.”

Actions You Can Take

The tight market, shifting attitudes, and the steep cost of employee turnover demand closer attention to hiring and retention practices. The experts recommend these approaches:

  • Offer flexible work hours. A Thomson Reuters survey of 471 Canadian lawyers in March 2021 found that 63 percent wanted to work flexible hours, nearly double the number from a similar poll pre-COVID.
  • Offer work-from-home options. In the same Thomson-Reuters survey, respondents said they wanted to work two days a week at home, up from a half-day before the pandemic. (A recent Korbitec survey found that 16% of respondents expect their firms to offer an office-only policy after the pandemic subsides.)
  • Build a culture that promotes work-life balance. At the end of last year, a Morneau Shepell survey found that over half of employees considering resignation cited “increased mental stress/strain at work”. One option: a policy that discourages late night or weekend email exchanges.
  • Provide technologies that make work easier. The Gallup organization, through years of research, found that “successful and engaged teams … have the tools they need to do their work”. Consider technologies that can automate mundane tasks and free up time for more rewarding, high-value work.

Concluding Thoughts

The evidence is strong that attitudes toward work are changing. Bridge the gap between what your firm wants and what your employees seek, and you’ll benefit from lower churn and more motivated and productive staff. Michael Sauber
Michael Sauber leads the marketing program for Korbitec, producer of Automated Civil Litigation Software (ACL). He has worked with document production technologies and professional services for over 30 years and is a frequent blogger on these topics.



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