The mass exodus of working professionals known as “The Great Resignation” had a profound impact on countless industries. Law firms throughout the United States were harshly impacted by 2021’s historic surge in employee attrition.
According to the ABA Journal, some US law firms saw attrition rates soar from 16% pre-pandemic to more than 27% in 2021. Comparatively, firms in England saw their attrition rates increase from just over 10% to approximately 14.3% in that same time frame.
What this data reveals is that something is seriously awry in the US legal sector. Associates are leaving practices in record numbers. Some are exiting the profession altogether.
If US law firms want to overcome these attrition trends, they must evolve. Those that continue to cling to antiquated practices will find themselves perennially understaffed and unable to effectively serve their clients.
Below, we examine 3 reasons why law firms in the US must abandon the status quo in favor of a more modernized approach. We also explore entity management software and its role in eliminating the manual processes that are fueling abhorrent retention rates.
1. The “Pay to Stay” Model is Unsustainable and Ineffective
The “pay to stay” approach to decreasing attrition is typically only effective when an organization’s compensation model is lagging behind those of its competitors. Even then, higher pay can only do so much to offset unfavorable working conditions.
For the most part, US law firms offer relatively competitive pay and benefits packages. However, many firms have attempted to solve their talent retention and hiring woes by throwing money at the problem. This strategy has proven quite ineffective because pay is not the root cause of attrition in the legal sector.
Not only is the “pay to stay” solution ineffective, but it can also threaten business continuity. When multiple firms in the same sphere of influence adopt this approach, talent bidding wars often ensue. Eventually, firms will reach a breaking point where they are unable to push wages any higher.
Therefore, law firms must avoid relying on wage hikes to solve hiring and retention challenges. Instead, they should work to remedy the underlying issues that are fueling attrition. Part of this equation involves investing in entity management software, but more on that in the final section.
2. Modern Associates Value a Work-Life Balance
The ABA Journal report included the results of a survey of lawyers who resigned from their firms. During the survey, researchers asked participants what changes might have prevented them from leaving. Benefits and pay were not the most listed reason. In fact, these improvements did not even make the top five.
Instead, many respondents wanted to see changes such as a better work-life balance and a more rewarding set of responsibilities.
What this data reveals is that modern associates value time off and positive working conditions as much or more than an increase in monetary compensation. The latest generation of employees also want to be challenged in the workplace and will likely experience burnout if saddled with redundant tasks day after day.
Unfortunately, redundancy has become the norm in many law firms. Over-reliance on manual processes minimizes how much time associates can spend on dynamic tasks.
Instead of working with clients, prepping documents, and honing their skills, associates must perform mind-numbing administrative tasks ad nauseam. This approach is not only inefficient, but it is also a poor use of junior associates’ talent.
3. A Reliance on Manual Processes Destroys Morale and Fuels Attrition
US law firms that hold fast to the status quo will continue to be plagued by considerable attrition rates. They will also struggle to attract talented junior associates, much less retain them. This truth makes sense because forcing bright-eyed, passionate associates to spend their days performing redundant tasks destroys morale.
So what can be done to address the talent retention conundrum? The answer is relatively straightforward. US law firms must decrease their reliance on manual processes. They can accomplish this by implementing leading-edge entity management software, like the platform developed by Athennian.
Athennian’s entity management software includes a suite of tools and solutions designed to streamline key business processes. With Athennian, law firms can free up junior associates and other personnel so that they can spend more time working on dynamic, billable tasks.
Ultimately, this will yield a better work environment, reduce the burden on each team member, and improve morale. It can also help US law firms curb attrition rates and avoid resorting to bidding wars to fill vacancies.
Want to learn more about how Athennian’s entity management software can help you free your firm from the constraints of the status quo and improve employee retention? If so, then we invite you to request a customized demo from an entity management expert.