What Happens to Law Firms if Lawyers Don’t Think They Need Them?

The isolation caused by the pandemic—and the great “re-thinking” that many did during that time—has led to greater individualism among lawyers and less of a reliance on or a belief in their firms.

The isolation caused by the pandemic—and the great “re-thinking” that many did during that time—has led to greater individualism among lawyers and less of a reliance on or a belief in their firms.

How Did It Happen?

When the pandemic hit, lawyers—like most everyone else—were forced to work in isolation at home. They were dealing with the anxiety of the unknown, economic uncertainty, and an invisible threat that could kill them.

And what were the first things many companies and firms did while their employees were feeling anxious and vulnerable? Lay people off and cut their compensation. That made lawyers even more insecure, and they took note.

Coming out of the pandemic, many felt they survived it on their own. Their firms were no longer a safe harbor.

Dr. Larry Richard, a lawyer, psychologist and founder of LawyerBrain, said lawyers learned their security no longer comes from “the institution, but from [their] resume … demonstrating their expertise.”

“That’s going to shake up the law firm world,” he said.

Mark Jacobson, managing director of legal recruiting firm LegalSearch USA and based in New York, agrees.

“Decades ago, people were very loyal to their firms and would try and stay with that job forever,” he said. “But attorneys are careerists now. They know their clients are interested in them and what they can do, not necessarily their firm.”

“I think this shift in power dynamics is akin to the changes in client/firm dynamics in the late 90s/early 2000s,” wrote Marcie Borgal Shunk, founder and president of The Tilt Institute, in an email in response to questions. Shunk wrote a column last year for The Legal Intelligencer about the shifting dynamic of talent having more power at firms.

“Just as then we saw client demands change law firm structures, investments and approach to market (marketing, [business development], client teams, client services, pricing roles) so too will we see law firms respond to talent demands with investments in professional development, recruiting, culture and leadership,” she said. “This shift will change the fabric of law firms.”

What’s Changed?

Rainmakers have been—to use a sports analogy—free agents for years, with the ability to switch firms when they want.

What’s changed, industry observers have said, is that a sense of individualism and greater confidence in their own abilities has trickled down to rank-and-file partners and associates, in part because of what they went through with the pandemic and seeing the war for talent play out.

They also just have more options than they used to.

“I think the last recession started a trend that the pandemic certainly accelerated and exacerbated, with the growth of in-house legal departments and more stuff going internal,” said Daniel Farris, partner-in-charge of the Chicago office of Norton Rose Fulbright.

He also said the growth of ALSPs, legal tech, and, more broadly, connections and contingencies presented by the gig economy have turbo-charged free agency. “That creates more opportunities for individual lawyers to move out and to do other things,” he said. “I think there are more avenues than there have ever been.”

All of that means they feel less reliant on their current firms for their professional success, have a stronger belief in their abilities, and they’re far more willing to move to different firms than in the past.

An Opportunity?

While some firm leaders are struggling to adapt, some legal industry observers said the shift in dynamics is something that law firm leaders should embrace.

“It’s a huge opportunity for the entire law firm world to start doing what the best leaders already do: leverage the power of each individual’s unique WIIFM (their ‘What’s In It For Me,’ a tried-and-true sales concept), instead of trying to squash it,” said Lauren Krasnow, an executive coach, consultant, lawyer and the “Fully Human Lawyer” columnist for The American Lawyer. “I hope leaders see the potential in this moment.”

But not all firm leaders do. One tension that’s surfaced, post-pandemic, is between traditionalists who believe you have to earn the right to have a say and younger lawyers who want greater flexibility from their firms as well as more of a say in how the firm is run.

Leaders who choose to be rigid in an environment where more lawyers feel less of an allegiance to their firms run the risk of losing talent.

“The most foolish thing any leader can do is to tell somebody to quote/unquote ‘stay in their lane,’” Krasnow said. “It’s incredibly demotivating and turns potential innovators into soldiers who just dial it in.”

Out of Sight, Out of Mind

Jacobson said that, among other issues affecting this trend, the fact that in many cities, lawyers were not required to be in the office much of the last two-plus years has weakened the bond between attorney and firm.

He said this had a few effects, one of which was the simple fact that it was easier to interview for new jobs when one doesn’t have to be in the office under watchful eyes. He said it was also just easier to interview, given that many firms resorted to video-based meetings instead of in-person get-togethers.

“Honestly, I think during those periods of isolation, people actually liked getting recruiting calls,” he said. “People were more willing to listen.”

Additionally, he said, the simple act of spending time together in the office strengthens one’s bond with both co-workers and the institution, and with that not playing a part for many firms over two-plus years, the stitching that held together the bond frayed.

“There is cohesiveness [that happens in the office],” he said. “But [being] in one or two days a week [in the office], that is lost. And then the loyalty is lost. They are just a voice on the phone instead of someone you are nurturing a relationship with.”

“The sharing of a meal; the sharing of a cup of coffee in a coffee bar; the sharing of a cab,” added Joe Macrae, founder and chairman of Macrae legal recruiting boutique, “those are things you miss out on” that help build culture at firms.

On top of that, Jacobson said, the lucrative offerings associates in particular were given over the last couple of years created a pretty tempting arrangement.

“Associates were being told how wonderful they were, given huge sign-on bonuses and a lot of promises,” he said. “It is hard to resist and it is seductive. So, associates see a $150,000 sign-on bonus and just jump ship.”

But on the other side of that, now that client demand has dwindled and associates for certain practice areas, such as in transactions, are not as highly coveted, an insecurity about job safety takes effect.

“With the overhiring, the herd is going to be thinned at many firms,” Jacobson said. “For the first time in years, associates have gone from feeling very secure and being on top of everything to being somewhat disposable.”

And what does someone who feels their job might be in jeopardy do? They prepare a plan B.

A Happy Home

Jacobson said that while money is of course a motivator, promotional windows and the opportunity to learn still rank high on most younger attorneys’ list of wants. To keep people around at the firm, leadership will likely have to bend (but not necessarily break) certain office traditions and invest more in the attorneys individually, as that is how they now view themselves: Individuals practicing law, not a cog at the firm.

Having a strong mentor, one that not only coaches but creates a strong bond with their associates, is key, Jacobson said, as is being realistic about the chances of making partner at the firm, if that is what the more junior attorney wants.

“Years ago, you got into a firm and five-to-seven years later you are a partner,” he said. “That is not a guarantee anymore. That has changed. So, associates want to go where there is opportunity.”

A Slowing Economy Won’t Give Leaders More Leverage

A prevalent belief is that a slowing economy will give CEOs and firm leaders more leverage with workers and return some of the workplace dynamics to what they were before the pandemic.

But several industry observers disagreed with that notion.

“They couldn’t be more wrong,” Shunk said. “This trend existed prior to the pandemic, just as client demands for value existed before the 2008/9 financial crisis. The fundamentals are founded in broader macro-trends including generational transitions. Talent will continue to make demands and law firms will ignore them at their peril.”

Are Law Firm Leaders Nervous?

Some industry observers have suggested that the changing power dynamic has made law firm leaders nervous. Others have countered that it’s not so much about that dynamic as it is a fear of losing rainmakers.

“Fear is the kryptonite to good decision-making,” Krasnow said.

“Everyone should consider data about what I call quiet risks,” she said. “Firms worry about a rainmaker leaving with firm clients while overlooking the quote/unquote ‘little’ things that cost millions of dollars in the aggregate: lawyers leave because of [diversity, equity and inclusion] microaggressions; associates jump ship because of shoddy mentoring and feedback; entire business services teams get poached because they don’t feel valued. These losses are often harder to quantify—but less quantifiable is definitely not zero.”

So What Should Firms Do?

“Evidence shows lawyers want the same things as other employees—to feel valued, to do meaningful work,” Shunk said. “Law firms who can provide environments where the care they demonstrate to talent—all talent—parallels the importance placed on billable hours will excel. Competitive advantage in the future will come from how well law firms cater to the needs of clients—and talent.”

Indeed, one of the primary takeaways from behavioral research cited in the latest State of the Legal Market report suggests making lawyers feel appreciated for their skills or humanity, rather than productivity or responsiveness, can help mitigate turnover.

Those components should be emphasized in training and mentoring programs as well as during evaluations, the report suggests.

“It’s the people stuff. It’s feeling like you’re not just another cog in the wheel. Your value to the firm is not viewed primarily as the number of billable hours you contribute. They recognize your professionalism and expertise, they treat you as a human being,” said Jim Jones, director of the Georgetown University Law Center on Ethics and the Legal Profession and co-author of the legal market report. “We know those are all the things that create glue in an organization.”

“Smart firms understand what motivates younger generations,” Krasnow said. “For example, many firms have alumni networks or internal career coaches who help their people move on, because they know that’s what people want. They know it’s an investment—an asset—not an expense.

“Firms are also listening and hearing, loud and clear: we want feedback, training and mentoring. Many offer great training programs on feedback and supervision,” she added. “What’s still lacking for most firms, though, are meaningful structural incentives for senior lawyers to make these and other motivations of younger lawyers a priority.”

Part four of the series will examine how the pandemic has altered industry incentives and how law firms are trying to catch up.