It may seem like recent associate salary increases are all about competing to get the best and brightest people in the door, but given the economic impact for some firms, real victory over the long term will depend on whether firms can keep the associates they recruit long enough to turn a profit. To compete in the associate salary wars, firms outside the Am Law 20 will have to do more than continually raise starting salaries. They will have to focus on minimizing the unintentional turnover of associates.
Retention has been discussed for more than 20 years in the profession, yet turnover rates are virtually unchanged during that time. Why is retention more important now? Because law firm economics show that firms outside the top tier are being squeezed out of the first-tier salary market, even though some firms don’t realize the extent of their losses.
