MORE EXPENSES, LESS TALENT – Associate salaries are growing throughout the market—but it may not yet be enough to keep turnover levels in check. Andrew Maloney dives into a report by Thomson Reuters finding that the law firm turnover rate was 13.8% over the past year. Firms also experienced a 7.2% bump in direct expenses in Q3 2021 compared to a year earlier, which was linked primarily to salary increases. If spending on talent remains high, and retention rates fail to budge, some firms could be in tougher financial straits in near future, leading to potentially more consolidations in the market. Still, there’s some good news: client demand in Q3 2021 was up over 4.4% compared to the same quarter last year, according to the report.
WAIT, WHO IS PUSHING FOR AFAs? - Conventional wisdom is overrated. Take for example, alternative fee agreements (AFAs). Surely it’s just legal departments pushing for those, right? Not exactly. As Frank ready explains, it may be law firms that are the driving force behind some of the growing number of AFAs in the market. The reasons are multifold, including firms looking to compete with ALSPs and the rise of law firms’ own captive ALSPs. Firms may even see a diversity benefit behind having more AFAs and less billable hours.