What Has the Great Resignation Done to the Legal Field?
In 2021, over 47 million Americans said, “I quit.” The numbers left many businesses reeling from a lack of staff. Companies have been forced to reduce their operating hours as they simply can’t staff their businesses. Has the Great Resignation’s impact on the legal field been significant? Learn how law firms have been affected and how you can reduce attrition rates.
What Is the Great Resignation?
The Great Resignation is a worldwide workplace phenomenon that features record numbers of staff quitting their jobs. It has affected nearly every industry, including the legal field. The motives of those who have quit their jobs vary but include the following:
- Upgrading to a job with better pay
- Switching to a job with more flexible work policies
- Switching jobs because of bad management or toxic workplace environments
- Switching jobs because they’re feeling underappreciated
- Going freelance, contract, or starting their own business
- Switching careers
- Quitting due to burnout
- Retiring early to avoid the hassle of learning new technology required to work from home during the pandemic
- Retiring early to avoid COVID-19 risks
But Is it the Great Resignation or the Great Reshuffle?
Although record numbers of Americans have resigned, that statistic doesn’t tell the entire story. Hiring rates have outpaced quitting rates since November 2020. Many workers have quit their jobs to accept a new job with more favorable conditions elsewhere.
If workers are leaving jobs in droves to take advantage of more favorable conditions, are there enough workers for all the jobs?
The professional and business services industry faced a 65% labor shortage in January 2022. Meanwhile, unemployment in March 2022 was only 3.6%, compared to 6% in March 2021. How can you stem the flow of departing staff while simultaneously attracting top talent?
The answer lies with why employees are quitting. Numerous surveys have turned up similar results. Now that workers have gotten a taste for remote work, experienced its benefits firsthand, and proven to their employers they can successfully work remotely, many are reluctant to return to the office full-time.
Gallup’s September 2021 update of its employment trends found that 67% of full-time, white-collar employees worked from home exclusively (41%) or partially (26%).
The poll also found:
- 91% of workers want to keep working from home post-pandemic.
- 30% of employees say they are very likely to quit if their company forces them back to the office.
- Two-thirds of employees believe remote work will either positively or negatively impact workplace culture.
- Most remote workers anticipate working a hybrid model in the upcoming years, while 27% expect to stay completely remote.
For employees who prefer remote work, here are their top reasons:
|REASON||Fully Remote |
|Save time on the commute||52%||48%|
|Flexibility to balance obligations||37%||48%|
|Feel more productive||35%||26%|
|Option to work in person with co-workers||N/A||30%|
Causes of the Great Resignation
The pandemic instigated the Great Resignation, but it didn’t start there. Blaming everything on the pandemic is too simple. Instead, the Great Resignation began more than a decade earlier with increased quit rates based on factors exacerbated by the pandemic. These factors include:
- Retirement. Due to the pandemic, many people retired earlier than they had previously planned. These decisions were based on prioritizing non-work areas of their life and fears of being vulnerable to Covid-19 health risks.
- Reevaluation of work-life balance. Some workers prioritize areas of their life outside of work, while others suffer from burnout during the pandemic. Junior personnel in white-collar industries have worked hard to make up for increased demand while foregoing training and mentorship opportunities.
- Reshuffling of workers to different jobs. Evidence suggests that high wage growth attracts job seekers to leave lower-paid roles. Some companies have responded by raising their salaries and benefits to attract these workers. In the legal industry, you can blame reshuffling on wage stagnation.
- Reluctance to return to in-person jobs. Some workers are worried about catching Covid in the workplace. Other workers strongly prefer the many benefits that come with remote work.
The Great Resignation’s Impact on the Legal Field
The legal field is feeling the pinch from more workers leaving their jobs and increasing demands for services. A 2021 survey showed that demand for legal services is up 6.5% among the polled large regional law firms.
Leading Up to the Legal Field’s Great Resignation
Just as in other professional industries, the legal industry can’t blame the Great Resignation’s impact entirely on the pandemic. Attrition was already an issue in the legal field before 2020, although the pandemic certainly aggravated the problem. Before the pandemic, the average associate attrition rate at Am Law 100 firms was reported at 16%. In 2021, that number had jumped to a jaw-dropping 27%.
Using the previous 16% attrition rate, it was calculated that for every 20 lawyers hired, 15 would leave within six years. Law firms are hemorrhaging talent even worse since the pandemic. More than 40% of all those leaving were post-qualification in the first six years of their legal career. This is a serious problem with associate attrition costs averaging between $200,000 and $500,000 per lawyer who walks.
When set against the reality that legal services demand are increasing, the outlook appears stark.
Law Firms’ Adaptability During the Pandemic
The legal profession is notoriously change-adverse. No one expected a big law firm to lead the way in remote work and flexibility. So, it was astonishing to see the industry adapt to the pandemic with lightning speed and usher in remote work options as the temporary new normal. Of course, it’s doubtful that at the time, many, if any, law firms suggested that remote work would ever become a permanent fixture.
Yet, while in the midst of remote working mandates, attrition in the legal sector continued to soar.
Why Are Lawyers Leaving?
One report on attorney turnover warned that law firms had lost nearly a quarter of their 2021 associates at the end of the last year. While stagnant salaries may be one issue, higher remuneration alone was not enough to combat attrition.
There are several suspected reasons for attrition within the legal field, including:
Backlog of Turnover
Some people have suggested that the legal industry isn’t experiencing anything unusual. They propose that you are seeing two years’ worth of lawyers who would have left their firms earlier if not for the uncertainty of the pandemic. However, turnover in 2021 was high.
A 2021 report on the legal industry showed that lawyer salaries nearly doubled between 1998 and 2018 while the cost of living rose 53%. From 1997 to 2002, the fastest growth was when salaries rose 45% from $72,840 to $105,890.
Between 2017 and 2018, lawyers’ wages grew at 1.6%, which is below the period’s 2.1% inflation rate. If you were a lawyer in 2017, your salary was likely worth less in 2018 after gaining an additional year of experience. Indeed, some lawyers would have found this demoralizing.
Anxiety, stress, and substance abuse are pervasive in the legal profession. According to the ABA report, lawyers tend to struggle with these issues more than other similarly educated professionals. These issues may stem from the long hours lawyers are expected to work.
Another issue related to wellbeing is law firms’ reluctance to utilize legal tech. There are new products that could significantly reduce the stress and exhaustion of pouring over hundreds of pages of document review. Of course, these products would also likely increase efficiency and productivity within the firm, so the reluctance to embrace new technology can be even more frustrating for associates.
Poor Legal Practice Management
Associates sometimes report becoming a punching bag for the firms’ legal partners. They don’t feel obligated to put up with superiors who yell at them, belittle them, and speak condescendingly toward them, no matter the salary.
A lawyer may regularly work 60 to 80-hour weeks for years. This workload can negatively impact life outside of work, causing associates to suffer in their romantic, family, and social lives. They tell themselves it’s just for a few years until they reach the next level. But at some point, they look around and notice their superiors are struggling with their health, divorces, addiction, and other unenviable side effects of the lifestyle. Some associates decide that what they’re giving up is not worth it.
Undervalued and Overlooked
In general, associate satisfaction is plummeting, and retention is going down with it. Junior corporate lawyers are finding the job to be unrewarding. Associates find themselves feeling undervalued and overlooked when exciting opportunities do arise.
Associates often find themselves doing work that they find boring, monotonous, and underwhelming, like document review and data management.
What Can the Legal Field Do to Retain Staff?
Law firms must analyze the reasons that lawyers are leaving. While one firm may find that attrition slows with a pay raise, other firms may find that the issue runs deeper than being overworked and underpaid.
Remember, legal compensation is more than just money. It can also be about time off and flexible work options. Some law firms are considering hybrid work models that would require their lawyers to be in-office only three days per week. This can help associates struggling to strike a healthy work-life balance while offering a bit of flexibility.
You may find it beneficial to provide employee satisfaction surveys periodically to see what your people want. They may want more training, advancement opportunities, recognition, flexibility, or more salary. It’s up to you to listen and make the adjustments. You may find that you can save your firm hundreds of thousands of dollars in annual attrition costs by actively listening to your associates.