This month, we report the results of our third annual survey of the leaders of the Am Law 200 law firms. The magazine received a very strong response, roughly 75 percent. Once again, this is a confident group, eyeing another year of higher profits and billing rates. (Our story, “Conservatively Optimistic,” begins here. Participants get a full report on results; excerpts are available online.)
We can handle only so much buoyancy. This year we also asked the leaders to report their biggest disappointment of the past year. One-third couldn’t think of any, and for a moment I flashed on a presidential press conference, but the comparison passed. For some of this crowd, perfection and equanimity are second nature. The others were more forthcoming and collectively pointed to a problem that roils large firms. Roughly one-third of those who answered reported that they had failed to grow as much as they wanted, either in general or in a specific office such as New York or London. In addition, another one-fifth lamented their loss of associates or partners, or the failure to successfully recruit more of both.
What that says, among other things, is that the war for talent has returned. There are at least two fronts, each with its own challenges. One involves associates. Cutting through all the chatter, what this comes down to is a struggle between firms and associates over who gets to decide when the kids will leave. And the immutable truth of firm life remains safely intact: Most firms want nearly all of their kids to go.
The days when the associates would hang around confident that they would snare a partnership are long gone-and not coming back. Now many who linger stay only until their student loans are under control, and then they map a quick exit. Firms complain bitterly that these young lawyers are leaving before the firms can fully recoup their investments in them. They have no one to blame but themselves. The profitability model is built on churn, and even the cream resent getting battered into butter.
There are other models. My current favorite, especially because I like seeing the eyes of my listener widen as I tout it, is Sussman Godfrey. They hire law students with resumes that otherwise might end up at, say, Munger, Tolles & Olson or Bartlitt Beck Herman Palenchar & Scott in Chicago. (Be honest: Can you say the same?) And they treat their associates as though they were future partners, not infantry fodder. They give their young lawyers responsibility early; they fast-track them toward partnership, and their big growth issue is whether they will have enough hands to steer their wheelbarrows of cash to the vault. It’s a revolutionary concept: Treat people like you want them to stay, and they just might.
The other front in the growth war involves partners. The conventional wisdom of the past decade has prescribed the acquisition of laterals as a necessary part of the modern major firm. But at most places, the result has been more of the same, rather than a transformation. More of the same, at current billing rates, is quite good, and it’s kept firms alive and comfortable. But seldom has it allowed them to vault higher up the financial or cultural charts. It’s hard to see how or why that will change. There simply aren’t enough difference makers-lawyers who bring so much better business or so much reflected glory-available to recruit. And if I read the disappointment answers correctly, there aren’t even enough non-difference makers around willing to join the firms who come calling.
Which brings me back to associates. If you can’t woo difference makers, maybe you can develop them. Go find an associate and hug her, metaphorically of course. Everyone needs a prot�g�. Disappointment needn’t be your lot.