Four ways to prevent the Great Resignation from ravaging your firm

According to the Bureau of Labor Statistics, in January 2022, the U.S. had 11.3 million vacant jobs to fill and not enough workers to do so! While this is a decrease from the 11.4 million jobs available in December 2021, it appears the shortage of workers is far from over.

The fact that this issue has had a significant impact on law firms was again confirmed for me recently after speaking with several partners who lead a range of legal practices at their firms. We discussed their challenges retaining their current staff and associates, as well as filling vacant positions vital to their firms’ operations and growth.

In a recent column, I discussed four trends driving the “Great Resignation”:

1. Employees close to retirement are taking the leap early;

2. Americans’ emerging “work-to-live” mindset;

3. New job opportunities abound thanks to fewer geographical limitations; and

4. Employers returning to “business as usual” while ignoring societal changes.

I concluded the column by stating that law firm managing partners are not powerless in fighting back against the Great Resignation, even when three of the four trends driving it are seemingly beyond their control.

So, what can law firm managing partners do to prevent the Great Resignation from ravaging their firms? Of course, every law firm’s situation is different. And, what works for one firm may not work for another. But from where I sit as the managing partner of a consumer contingency law firm with over 20 attorneys and roughly twice as many staff, here are four ways I believe my firm and others like it can prevent the Great Resignation from ravaging our firms.

With so much employee mobility today, law firms need to create an environment where their best people don’t want to leave. We must keep these key people so happy that they have no desire to look elsewhere for employment.

The wrinkle is that what makes one top performer happy could be of no interest to another top performer. Sure, to keep most top performers, firms may need to pay them “above market” compensation. But keeping others happy might mean allowing flexible schedules that jibe with their childcare or elder care responsibilities, allowing attorneys to dabble in other legal practices within their firms, or even giving attorneys the autonomy to launch new practices.

The past few years should have taught us we now have access to talented people who live farther away from our firms’ offices than any rational human being would be willing to regularly commute back and forth from. The current state of technology, combined with the fact that remote work isn’t going away, provides law firms an opportunity to become more efficient and reduce their overhead by recruiting nationally and internationally.

Firms can look outside Greater Los Angeles, California, and even the United States for new staff, like paralegals, administrative assistants, file clerks, and marketing and business development personnel. For some legal practices, a California-licensed attorney working out of their home in Santa Fe can be as productive and efficient as a California-licensed attorney sitting in an office in Southern California. For others, a research and motions attorney licensed in another state can bring added firepower to a firm for lower compensation than a local attorney would command. And of course, fully remote attorneys and staff will not require office space, which can help firms bring down the cost of their overhead.

If a law firm is fortunate enough to be drowning in work, but not fortunate enough to have the right number of attorneys and staff the firm needs to handle all that work, it should consider finding another law firm that is like-minded and has similar capabilities that it can team up with to work on cases.

As the statistics seem to confirm, not everybody is looking for a new job. There are many solo and small law firms that are not looking to expand or hire people, nor are their equity partners looking to become W-2 employees elsewhere, but that can take on additional work. Assuming that joining forces will pass ethical muster, and there’s agreement on the scope of the partnership and how legal fees will be divided up, this kind of collaboration can be a win-win-win for a firm that is at overcapacity, a firm that is under capacity, and their shared client.

If a law firm has more matters than it can handle but it cannot staff up because of resignations or recruiting issues, it should consider increasing its thresholds. If a firm is a personal injury firm that only takes $200,000+ cases, it should transition to only taking $500,000+ cases. If a firm is a corporate firm that bills by the hour, it should consider increasing its hourly rate.

When a firm’s capacity is limited, increasing its thresholds should increase its profitability because the firm will probably do the same amount of work on similar matters regardless of the potential recovery or its attorneys’ hourly rates.

As a group, law firm managing partners have had a whirlwind past few years. Some partners presided over record-breaking profits at their firms. Others presided over pandemic-inspired technological revolutions that changed how their law firms practice law and serve clients.

But I bet the vast majority of law firm managing partners have seen attrition at their firms climb to rates they’ve never seen before, including departures of valued attorneys and staff that may have stung a bit more than others.

There’s no telling when the Great Resignation will slow down. Given the Bureau of Labor Statistics’ data I cited at the beginning of this article, it may not happen soon. But as law firms still grapple with the Great Resignation, I hope these four strategies allow your firm to continue to prosper during a time of heightened attorney and staff turnover.