Let’s Make A Deal: Recruiting, Retention, & Games People Play

What Motivates Associates?

At face value, it is a simple question. Once upon a time in TV land, some might have called it a $64,000 question. Unfortunately (and to the consternation of countless partners and firm administrators), there is no simple answer. To make matters worse, if law firms answer the question incorrectly, the result can be extremely costly. According to a recent study, “The average total cost of an associate's departure is $315,000, approximately twice the average associate’s salary.” More specifically, the study estimated that each time an associate leaves, it costs a firm roughly $244,000 in investment costs and $71,000 in separation costs.² In light of this reality, it is not surprising that many firm administrators and partners are focusing heavily on their recruiting and retention practices.

Generational and Cultural Diversity

As a result of changing demographics and increasingly global business practices, firms are becoming more generationally and culturally diverse than ever. While this diversity of perspectives promotes creative solutions and facilitates practice innovation, it also presents unique challenges with regard to recruitment and retention. For example, what motivates Baby Boomers does not necessarily motivate the members of Generation X or Generation Y.

Younger associates today expect firms to provide high salaries, flexible work schedules, flexible career paths, mentoring, as well as extensive professional development opportunities. At the same time, there is also a growing lack of interest in the traditional career path of partnership as evidenced by high associate attrition rates. In contrast, Baby Boomers hold a different view and often express concerns that the younger generations are selfishly embracing an entitlement mentality. Thus, each group has its own expectations regarding compensation, benefits, and overall motivation, and law firm management is struggling to strike a balance.

In the past, after six to eight years of loyal service, an associate could frequently look forward to the title, respect, and responsibility of becoming partner in a firm. Associates today, however, must learn to play by different rules than their predecessors. More recently, partnership has been transformed, as evidenced by the myriad of titles and classifications now employed by firms across the country. At many firms, the traditional partnership track is split into a two-tiered system lasting seven to nine years in which associates first progress through “non-equity partnership” before potentially becoming full “equity partners.” (Additionally, the role of “of counsel” has increased as a non-partnership option for associates with ten or more years.)

While existing studies can shed more detailed light on matters like motivation, generational diversity, and cultural diversity (since there is not enough room in this short article), in the end, law firm management needs to appreciate that the culture of every firm is different. As such, the best way to ascertain what motivates your firm’s associates is to personally ask them.

Internal Communication Practices

In the September 2005 issue of Law Practice, an article titled “Enhancing Your Firm’s Internal Communication” opened with the following declaration: “In almost every employee survey, lack of internal communication is cited as a top reason for dissatisfaction.”⁴ Indeed, this sentiment is a common one. Lawyers attend law school to learn the law. The practice and business of law, however, is generally learned by trial and error. Unfortunately, when it comes to internal communication, it is often more error than trial.

In “Groundbreaking Research: Motivating the Next Generation,” Karen MacKay notes,

Our fondness for giving or receiving feedback is very different depending on our demographic. For senior partners who are still in [a] firm but who were born before 1945, no news was good news. For about 74% of the partners in firms today who were born between 1946 and 1965, feedback is an annual ritual that justifies a raise in pay, a bonus, or both.³

Such notions of feedback, however, are in stark contrast to the expectations of younger generations. “For the vast majority of associates in law firms today, feedback is an indication that someone cares about their development as professionals - about their future.” This disparity in expectations, at least in part, helps to explain a common source of associate dissatisfaction.³

So how might law firm administrators and partners begin to more effectively address these generational and cultural diversity issues? A good start would be to consider a customer service best business practice. Customer satisfaction is all about managing expectations. In Selling the Invisible, marketing guru Harry Beckwith advises that “a customer’s satisfaction is the gap between what the customer expects and what she gets… To manage satisfaction, you must carefully manage your customer’s expectations.”¹ When it comes to the business of law, there are external customers as well as internal customers. Under this analogy, associates are internal customers. Thus, by directly asking associates what motivates them and by clearly outlining both what the firm expects from them and what they can expect from the firm, law firm management can facilitate the internal communication process and minimize associate dissatisfaction.

Is That Your Final Answer?

While individuals (particularly lawyers) primarily motivate themselves, firms can do their part to create policies, practices, and places that facilitate the business of doing business. “The right people are motivated from within. However, the right law firm environment can foster motivation. The wrong law firm environment can neutralize it or even extinguish it.”³ By focusing on internal communication practices, firm administrators and partners can efficiently, effectively, and pro-actively impact the bottom line, increasing retention, reducing turnover, and fundamentally learning how to play a different game — Who wants to be a millionaire?

¹ Beckwith, H. (1997). Selling the Invisible. New York: Warner Books.
² Catalyst. (2005). Beyond a Reasonable Doubt: Building the Business Case for Diversity. Retrieved April 24, 2006, from http://www.catalystwomen.org/files/full/Flex%20in%20Canadian%20Law%20full%20report.pdf.
³ MacKay, K. (2005). Groundbreaking Research: Motivating the Next Generation (Edge International). Retrieved on April 24, 2006, from http://www.edge.ai/Edge-International-1057915.html.
⁴ Shannon, M. P. (2005, September). Enhancing Your Firm¹s Internal Communication. Law Practice, 31(6), 44-45.