A New Approach to Associate Retention
Posted By Rob Millard - 0 Comments -
When all is said and done, retaining the right people within its ranks is probably the most crucial strategic issue facing any professional service firm.
The ongoing conundrum of how to balance partner profitability on the one hand with the need to retain key skills in the firm has developed another layer, with London-based global law firm Allen & Overy scrapping its firm-wide bonus scheme as part of a shake-up that will hike London associates' pay by 15% from 1 November. Newly minted attorneys in the firm will now earn £63,300 (about US$117,500 at today's exchange rate) which makes it the highest paying City (of London) practice.
For more information, read the article in today's Legal Week, here.
If you do read the article, you'll also be interested in the comment string developing below it, for instance:
"When are City firms going to realise that chucking money at the problem is not a solution in itself? The underlying problem is diminishing partnership prospects and the level of disconnection, rightly or wrongly, felt by junior lawyers.
"Take the big dollar, get a couple of years magic circle training & experience on your CV, then get the hell out and get a more rewarding job and a life"
A great deal of internal consultation preceded this decision. Also, A&O's partners and senior staff are no slouches when it comes to the theory of business management. David Morley, the managing partner (see pic above,) has been putting them through a tailored programme at the Judge Business School at the University of Cambridge for some time now.
So it is a little flippant to broadly criticize A&O's solution simply because it focuses on the money. Money, especially for a junior lawyer with study debt and the prospect of school fees and a mortgage, is extremely important.
On the other hand, it is not the only issue. My friend and fellow-principal in Edge International, Karen MacKay, did some groundbreaking research a little while back on what really motivates associates and what partners think motivates associates, and the gap in between. Read more on this study here and here and here.
The problem is that the perfect solution is the ultimate 'Holy Grail.' In other words, superior compensation AND all the lifestyle benefits. As we all know, these two are usually mutually exclusive. The real world is that there is no cookie-cutter solution to the associate compensation retention / compensation issue, and every firm has to develop its own. Also, the process of reaching the solution (making everybody feel that it is transparent, fair and realistic, etc) is at least as important as the solution itself.
Finally, associate retention is a complex phenomenon that is inextricably woven into the fabric of the firm, rather than an issue that can be addressed in isolation. It is driven by so many diverse factors. The high salaries, the cool clients, the great work and the culture and systems that drive associate satisfaction are as much simply a function of a superbly managed firm, as anything that the firm's management can address overtly.
Comments, as always, are most welcome. Please post them below.
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