New York Lawyer
February 27, 2003

Q:
All law firms seem to think short-term, hiring lots of people during good times and firing lots during bad times.

Boom or bust, associates are overworked, to the point of burn out. The partners seem to think it is more economically efficient to hire new young lawyers, burn them out, get rid of them (particularly during a bust), and then hire another batch of new lawyers who are just as keen to be overworked.

There is no shortage of talented, dare I say, brilliant people out there, so even if the result is that lawyers will not be loyal to their firms, it does not really matter because there will always be someone there to do the work. Any thoughts?

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A:

While some, perhaps many, law firms certainly fit your description, others are more protective of their lawyers. Certainly the billable-hour financial model that firms depend on encourages the churn-and-burn syndrome you describe. Whether that syndrome really is economically efficient is very debatable. There are no studies available to show that short-term thinking in business pays off; there are reams showing that long-term thinking is the key.

For instance, the cost of turnover is high: estimates on the cost of replacing valued associates range from $150,000 to $500,000. And on your point that there's an endless supply of "brilliant" lawyers out there, a firm with a volatile reputation for hiring and firing can scare off good prospects who don't like the idea that their employment may be gone in a flash. Therefore letting churn-and-burn scenarios persist can easily be challenged on financial grounds.

It's hard to predict how business cycles are going to proceed, and therefore it's difficult for a firm to know how many lawyers to maintain on staff. Indeed, some firms have retained lawyers, expecting a quick recovery, only to be disappointed that the recovery hasn't taken off as anticipated. And it's a common failing not to think long term, because of the immediacy of pressing problems; because current leadership wants to appear to be doing something and not missing opportunities or failing to recognize risk; and because long-term thinking seems slow, old fashioned and something for suckers. However, look no further than the dot-com bubble to refute those arguments.

In some firms there seems to be a dearth of creativity in deciding how to handle a downturn, and not much appetite for sacrifice. How about partners taking less money when there's a downturn? What about flexible work arrangements? And might firms consider maintaining more conservative hiring patterns all around, not staffing up too precipitously in flush times nor dumping lawyers in bad times? Those firms with an ironclad determination not to resort to layoffs except in the most dire circumstances tend to be more circumspect about hiring in the first place.

On the other hand, let's bear in mind that many, many new recruits go to large, sweatshop firms with the express purpose of staying only two or three years, pocketing lots of cash and moving on to more congenial settings, fueled by the prestige of having worked at a high profile firm. In some respects this works all around - the firm gets the lower priced help it needs, and the younger folks get a fancy firm on their resume. It might be a chicken-and-egg question. Who's to blame, the law firm leaders that put a burnout system in place, or the fresh recruits who know from the get-go that they are not dedicated to big firm life?

The question is, how can you tell the difference between a firm that only values dollars and hours, versus a workplace that has some concerns for you as an individual? What's the distinction between a workplace that sees new hires as individuals, and not as fungible units to be moved in and out without missing a beat?

One approach is to heed remarks about the firm's reputation before joining it. There are many places that are infamous for working its people mercilessly, while others are considered more humane. Once in a firm, the indicators of a more comprehensive system of evaluation than sheer stamina is that people are evaluated on factors other than hours, and are not advanced solely on that criterion. In law firms with more loyalty to its new hires, lawyers are evaluated in rigorous detail, with performance reviews that give concrete ideas about how to improve performance. People are then given actual help in development, not just left to sink or swim. And if someone makes a misstep, he or she gets a second chance rather than just being abandoned. Looking for these specific factors, and asking about them before going to work for a particular firm, can help you to avoid landing in a pressure cooker with no regard for individuals other than the hours they can rack up.

The wisest course is to treat each firm as an individual organization and evaluate it according to the criteria suggested above, in determining whether there is any loyalty factor and any measurement criteria other than hours, and then to act according to your own desires in the marketplace.

Sincerely,
Holly English
Principal Consultant, Values at Work