Associate attrition is a long-standing, recurring event within private practice organizations and leveraged partnerships. This report is the third benchmark study of associate attrition undertaken by The NALP Foundation and is the most comprehensive assessment of the attrition phenomenon to date. It is a response to the increased competition for legal talent and clients, changed business models and a global legal marketplace that have converged to place new emphasis on the control of and response to associate attrition in all market climates.
The findings in this report reflect associate hiring and departures from 1998-2003 as reported by a representative sample of law firms nationwide. The survey was distributed broadly to NALP-member law firms; a total of 84 firms representing a range of sizes and geographic locations provided detailed data on 7,227 entry-level associate hires and 5,976 lateral associate hires. The study provides in-depth information on cumulative associate attrition, i.e. the percentage of associate departures that occur over time; and annual attrition, i.e. the average percentage of associate departures within a given year. A brief summary of the findings that are detailed elsewhere in this report follow:
Cumulative attrition rates for entry-level associates, reported at an overall rate of 8.4% within 16 months of employment, have increased only slightly from the rate reported in 2000 (8.3%) and decreased somewhat since 1997 when the rate was 9.2%.
The largest firms of more than 500 attorneys generally reported lower entry-level associate attrition than firms of other sizes. Mid-size firms of 251-500 attorneys generally reported the highest rate of attrition which could be attributed to many factors, including the opportunities their experienced associates had to take new jobs as larger firms were growing their associate cadres.
Cumulative attrition rates for lateral associates, available for the first time in this report, reveal that about one in five laterals (18.9%) had departed their law firm employers at or near the end of their second year of employment. Minority male lateral associates were most likely to have departed their employers at or near the end of their second year of employment with 23.5% doing so.
Firms of 251-500 attorneys reported the highest lateral attrition among all firms, with more than half (52.3%) of the Class of 1998 gone by the end of their third year of employment. For all datelines and all class years, firms of more than 500 attorneys experienced the lowest attrition rates among firms of all sizes.
Annual attrition of lateral associates was higher than that of entry-level associates, with 19.3% departing their employers on an annual basis. Still, the largest firms experienced the lowest rate of lateral departures (17.1%) and smaller firms of 251-500 attorneys the highest rate at 22.4% annually. Among lateral associates, minority women were most likely to depart, with 24.9% doing so annually.
Reasons for associate departures were compiled and analyzed in this study of attrition, the first time such an effort has been undertaken. Overall, the most prevalent reason reported for departures was “unmet performance standards,” which was associated with the departures of 20.4% of all associates who left their jobs. Women were somewhat less likely to have left for performance reasons (18.2%) than men (22.5%) and associates overall (20.4%). Minorities were somewhat more likely than all other associates to have left for this reason (30.3%). Other factors most frequently reported as overall reasons for associate departures included geographic preference (16.8%), advancement opportunities (7.4%) and billable hour pressures (6.1%).
Detailed information was compiled on performance-related departures, including analyses of performance-related attrition by year of departure. Somewhat more associates from all class years departed for this reason in 2001 and 2002 than in 1999 and 2000. Performance-related departures by class year revealed somewhat higher rates of departure for the Class of 2000 than for any other group.
Departure destinations of associates were documented, with the findings revealing that nearly half (42%) of all entry-level associates who left a law firm job chose another law firm as their subsequent employer. Among laterals, just over one-third (34.5%) who left law firms went to another firm. Entry level associates also acquired government legal positions at a relatively high rate (12.1%). About that same percentage of lateral associates (13.7%) took legal jobs in business.
Summer program participation, when correlated with associate attrition, revealed that among all entry-level associates hired from 1998-2003, 64.8% of them had been prior summer program participants in their employer’s firm. In contrast, only 1.9% of lateral hires had participated in prior summer programs of their employers. Among associates who had departed their employers, just over half (58.6%) had been prior summer associates in the firm.