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The 2007 UPDATE on Associate Attrition—Findings from a National Study of Law Firm Associate Hiring and Departures is the seventh report on associate attrition and mobility in more than a decade-long series of research studies conducted by the NALP Foundation. The study offers firms the opportunity to participate in a survey that is designed to examine and measure attrition in a number of ways and to offer insight into often contemplated areas of associate hiring, development, and retention. Included in the report are hiring and attrition statistics for entry-level and lateral associates broken down by gender, minority and non-minority associates, and law firm size. Annual average attrition rates, percentages of associate departures that were “desired/wanted,” “neutral,” or “unwanted,” reasons for associate departures, and departure destinations of associates are featured segments of the report. The report also includes analyses and comparisons of 2006 attrition statistics.
Concerns with increasing costs of hiring and training associates fresh out of law school may be tempered by new research data released in April 2008. Although the overall associate attrition rate remained essentially unchanged over the past year (down 1% to 18%, compared to 19% in 2006), findings from the NALP Foundation’s annual study of associate attrition show that law firms across the country are more able to retain associates hired at entry level than those hired laterally. In particular, lateral-hire associates tend to depart firms more quickly than their entry-level counterparts, and departures of lateral hires are more frequently welcome, according to statistics on firm-reported data.
The 2007 UPDATE on Associate Attrition—Findings from a National Study of Law Firm Associate Hiring and Departures includes findings related to associate departures by tenure that reveal a rather significant difference in the average length of time lateral and entry-level hires stay with their firms. Responding firms reported that 35% of departing lateral associates left within two years of joining the firm and 59% left within three years from the date they were hired, much higher than the 15% of entry-level hires who left their firms within two years and 37% who left within three years.
The findings relating to whether associate departures were, from the firm’s perspective, “wanted” or “unwanted” also reveal significant differences. Respondents reported that a larger percentage of departures of laterally hired associates were “wanted” or desired by the firm (30%) than were the departures of associates hired as entry-levels (19%). Firms also reported that associates who had not been prior summer associates were much more likely than associates with prior summer employment at the firm to be reported as wanted or desired departures (29% and 19% respectively). Typically, firms hire their entry-level associates predominantly from their summer associate classes.
As was the case in the 2006 study, the most frequently cited reason for lateral associate departures was “work quality standards not met” (20% in 2006 and 18% in 2007). This was noted as the reason for entry-level departures in just 10% of the cases (figure is same for 2006 and 2007).
One possible explanation for the less favorable results in lateral retention is the difference in the processes by which firms bring entry-level and lateral associates on board. In 2002, the NALP Foundation published a national report titled The Significance of Summer Programs. Well over half of the 304 participating firms identified “development of loyalty to the firm” and “relationship development” as goals for their summer programs—a function noted anecdotally as being more achievable by “home-growing” associates through hiring summer associates as full-timers rather than through lateral hiring. Firms are often able to achieve these goals with clearly defined hiring objectives and standards, as well as formalized orientation, mentoring and training programs.
These programs and processes are not often used with lateral hires. The lateral associate hiring process can be hurried due to a departure or increased workload—which often result in the need to get the incoming associate up to speed and productive as soon as possible. For these reasons, and because of the small pool of qualified lateral candidates available, the strategic process practiced and strict hiring standards kept in entry-level hiring are often relaxed, and key elements such as mentoring and integration—those activities that foster loyalty and relationships—are overlooked. The 2007 UPDATE on Associate Attrition suggests that the time, resources and attention given to “home-growing” associates is paying off for many firms and, in turn, having a desirable impact on associate attrition despite escalating salaries and “ramp up” time. This favorable experience with home-grown associates may explain the slight up tick in entry-level hiring revealed in the study. As indicated in the table below, firms hired slightly more entry-level associates (52%) than lateral associates (48%) in 2007.
In the 2006 study, respondents reported slightly more lateral associate hires than entry-level associate hires. Relatively favorable experiences with entry-level hiring may cause this trend to continue. Yet one possible conclusion that may be drawn from the most recent study is that lateral hiring and retention could benefit if these attorneys received the same investment of time that entry-level associates receive, changes which may lengthen the time that lateral associates stay with the firm and reduce unmet performance-based departures.
