A View from New York: Avoiding a “lost generation” in the lawyer supply chain

The continuing health of a law firm depends on its ability to find and develop junior
talent and despite the prevailing economic situation, now is not the time to turn off the
supply, argues Bruce MacEwen of Adam Smith, esq.

An unspoken, and certainly
uncelebrated, aspect of the US law
firm model is that they rely upon
built-in associate attrition. “Built-in”
has two traditional meanings but also now a
new one:
Traditional A: law firm assistants leave of
their own accord due to a variety of factors:

• they have paid off their student loans;

• they are ambitious but the hours are more
than they bargained for;

• they basically like practice but do not have a
true passion for it;

• they realise that key family time coincides
with partnership progression and they
choose the family.

Traditional B: law firm assistants are not
performing as required and are encouraged to
leave.

New meaning C: There has been zero
attrition.

The new reality of attrition is however that
there isn’t any. What to do? First, one can
simply acknowledge, from an economic and a
human perspective, that this is entirely
understandable. Currently, having a job is
priceless – few associates now have visions of
leaving to join a hedge fund or private equity
house. But the question remains: what can
your firm do about it?

Logically, law firms can attack this the way
they handle their three traditional pools of
talent:

• summer associate placements and graduate
hiring;

• the lateral associate market; and

• what you do about your incumbent
associates.

The easiest response is to alter your policy
towards lateral associates: go from selective to
super-selective. Only those with spectacular
credentials in desperately needed practice
areas get a second look.

The intersection of summer interns and
first-year hiring, and the ranks of existing
associates, is where it gets interesting.

A pragmatic view is that a firm’s 3rd-6th
year associates are relatively known quantities
– trained to your standards and liking – and
that removing some to make room for freshfaced
barely-qualifieds is borderline crazy. You
are demonstrating disloyalty to those in the
firm to gamble on unknown quantities. I
would argue the opposite.

We have read about the virtues of “just-intime”
supply chain delivery in
manufacturing. Our industry is the very
opposite. Our “supply chain” (associate
talent) is three to six to ten years long,
depending on where you draw the start and
finish lines. It takes that long to turn a
potential lawyer into an actual, performing
contributor to clients and the firm.

The relevance of this to today’s personnel
challenge is that you cannot introduce a gap
into that supply chain. You need to be in the
business of continually recruiting new
talent, in order to feed the continually
moving production line of senior to midlevel
to junior staff required to manage
cases and transactions. You cannot inflict
the equivalent of a “lost generation”.

Counter-intuitive as it may seem, I
recommend continuing to feed the associate
pipeline from the start, even at the cost of
some enforced “attrition”. The logical reason
is that some of the new talent will be better
than the existing talent. It has to be the case.

You may be satisfied with the
performance of your 3rd-year qualified
assistants currently, but how do you know
those law school graduates won’t be better
at their level?

When I spoke about a “supply chain” I
wasn’t speaking metaphorically. If clients
are your demand, talent is your supply.
Your “supply” (talent) is what you have to
sell. You have few higher priorities than
increasing the quality of that supply.
A prudent reason argues for the same
continue-to-recruit policy: if your firm stops
recruiting, be prepared for the market to
have a long memory and to punish you
when the good times return.

Another reason is the positive and
optimistic message it sends to your firm
internally, to the marketplace, and to any
others (clients?) whose opinion you value. It
says, “We are investing for the future,
confident in the long-term value of our firm
and what we provide to our clients”.

When century-old firms are collapsing
now is not the time to shut down the
processes that feed your talent pool, or to
act as anything other than a vibrant, going
concern. Now is the chance to upgrade the
talent “gene pool”. No voluntary attrition?
I’m sorry to report that your business model
depends on attrition, and attrition there
must be – unless you’d prefer to reinvent
the model entirely.