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Paradigm Shift: Applying Human Resource Management Theory to the Large Law Firm Recruiting and Selection Process

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Paradigm Shift:
Applying Human Resource Management Theory
to the Large Law Firm
Recruiting and Selection Process
Vanessa L. Johnson
1
Introduction
Historically, law has been viewed as a profession rather than a business.1 Lawyers
distinguished themselves from businesspersons because “in contrast to businesspersons, who
maximize financial self-interest, lawyers altruistically place the good of their clients and the
good of society about their own self-interest.”2 Although fundamentally, the philanthropic ideals
of the legal industry have not changed, today, “because lawyers have always earned their living
selling their services to private consumers on the market [,] . . . because much of their work
involves representing the interests of businesses,”3 and, most importantly, because “the US legal
industry includes around 165,000 law offices that generate annual revenue of $180 billion,”4 “the
widespread perception is that law practice is a business.”5
However, despite this paradigm shift, arguably, in many ways, the business of law has not
adopted many of the best practices of traditional “big business.” This failure is most evident in
the legal industry’s approach to human resource management. More specifically, this essay
argues that the legal industry in general and large law firms in particular have “people problems”
and that legal employers can and should address these issues by applying the knowledge gained
from the substantial body of management research to improve their staffing practices.
Part II will present information that demonstrates the extent of the “people problems”—
widespread job dissatisfaction, high attrition rates, and minimal diversity—and discuss the
positive financial gains that are possible if legal employers address these issues. Part III argues
that to solve these problems large law firms should employ human resource management theory
1 Russell G. Pearce, The Professionalism Paradigm Shift: Why Discarding Professional Ideology Will Improve the
Conduct and Reputation of the Bar, 70 N.Y.U.L. REV. 1229, 1230 (1995).
2 Id. at 1231.
3 Id.
4 First Research, Legal Services Industry Profile Excerpt, at http://www.firstresearch.com/Industry-Research/Legal-
Services.html (last visited Jan. 9, 2006).
5 Pearce, supra note 1, at 1232.
2
and practices commonly utilized in the general business world to change and improve their
recruiting, selection, and retention practices. Parts IV and V discuss and analyze the current large
law firm recruiting and selection process and retention programs, and Part VI proposes changes,
which incorporate human resource research and best practices.
Part II
The most important resource of any professional services firm is its employees,6 and “in
an economic environment marked by hypercompetition and international expansion, where
intangible assets are increasingly the basis of competitive advantage and growth opportunities,
anything less than optimal workforce success is not just a missed opportunity; in many cases it is
a direct threat to the survival of the firm.”7 Accordingly, the strategic management of human
resources should be of paramount importance to law firms; yet, statistics generally show that
these legal employers are not effectively or efficiently managing their human capital.
The first “people problem” is job dissatisfaction, and empirical research suggests “job
dissatisfaction among lawyers is widespread, profound and growing worse.”8 Three national
American Bar Association surveys have produced the most comprehensive data on career
satisfaction of lawyers and report a significant decline in the job satisfaction of attorneys.9
In 1984, 41% of lawyers said that they were "very satisfied" with their jobs; in
1990, only 33% of all lawyers surveyed were "very satisfied," a decline of one-
fifth in just six years. At the same time, the number of lawyers who were "very
dissatisfied" with their jobs rose from 3% in 1984 to 5% in 1990. 10
6 DAVID H. MAISTER, MANAGING THE PROFESSIONAL SERVICE FIRM xvi (Free Press Paperbacks 1997) (1993).
7 MARK A. HUSELID, BRIAN E. BECKER & RICHARD W. BEATTY, THE WORKFORCE SCORECARD: MANAGING
HUMAN CAPITAL TO EXECUTE STRATEGY 1 (Harvard Business School Publishing Corporation) (2001).
8 Patrick J. Schiltz, On Being a Happy, Healthy, and Ethical Member of an Unhappy, Unhealthy, and Unethical
Profession, 52 VAND. L. REV. 871, 873 (1999)(quoting David Margolick, More Lawyers Are Less Happy at their
Work, a Survey Finds, N.Y. TIMES, Aug. 17, 1990, at B5).
9 Id. at 883.
10 Id.
3
These surveys not only indicate a substantial decline in job satisfaction, but also report that the
dissatisfaction is widespread, stating “the extent of lawyer dissatisfaction has increased
throughout the profession. It is now reported in significant numbers by lawyers in all positions--
partners as well as junior associates. It is now present in significant numbers in firms of all sizes,
not just the largest and the smallest firms.”11 Although these statistics describe the overall level
of career dissatisfaction among lawyers, “it is important to understand . . . that career
dissatisfaction is not distributed equally throughout the profession.”12 Most surveys consistently
report that attorneys in large law firms are the least satisfied,13 and the 1990 ABA study said that
‘this increased dissatisfaction is directly caused by a deterioration of the lawyer workplace . . . In
particular, the amount of time lawyers have for themselves and their families has become an
issue of major concern for many lawyers.’14 However, again “workloads, like the job
dissatisfaction to which they so closely relate, are not distributed equally throughout the
profession.”15
For example, only 56% of those in private practice agreed that they had enough
time to spend with their families, compared to 74% of corporate lawyers and 79%
of government lawyers. Similarly, only 46% of private practitioners said that they
had enough time for themselves, compared to 53% of corporate lawyers and 66%
of government lawyers.16
Furthermore, “within private practice, the general rule of thumb is the bigger the firm, the longer
the hours.”17 Accordingly, “the ABA's survey of young lawyers in 1995 found that 62% of those
working in firms of at least 150 lawyers were dissatisfied with the amount of time they had to
work, while only 28% of those working in firms of fewer than seven lawyers had the same
11 Id. at 883-84.
12 Id. at 886.
13 Id.
14Id. at 890.
15 Id. at 892.
16 Id.
17 Id.
4
complaint.”18 The long hours and overwhelming workload are principal causes of attorney job
dissatisfaction, but they are not the only ones. Lawyers also complain about the pressure to bring
in business, the lack of control over their lives, and the tedium of the work.19
Job satisfaction is systematically correlated with turnover,20 and a more recent study of
associate attrition undertaken by The NALP Foundation supports the premise of widespread
lawyer dissatisfaction discussed above. The study reflects associate hiring and departures from
1998-2003 as reported by a representative sample of law firms nationwide and 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).21 The findings revealed the second “people problem”, high rates of associate
turnover.22 The report exposed a cumulative attrition rate of 8.4 percent within 16 months of
employment for entry-level associates and an 18.9 percent rate for lateral associates at or near the
end of their second year of employment.23 Furthermore, the annual attrition rates were greater.24
“The annual attrition rate for entry-level associates was 13.8%, with firms of more than 500
attorneys experiencing a lower rate of departures (11.6%) and smaller firms of 251-500 attorneys
a higher rate (17.2%).”25 “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.”26
18 Id. at 893.
19 Id. at 924.
20 Aaron Cohen, Turnover among Professionals: A Longitudinal Study of American Lawyers, 38 HUMAN RESOURCE
MANAGEMENT 62 (Spring 1999).
21 The NALP Foundation, Keeping the Keepers II: Mobility and Management of Associates; at
http://www.nalpfoundation.org/webmodules/articles/anmviewer.asp?a=89&z=15 (last visited Jan. 9, 2006).
22 Id.
23 Id.
24 Id.
25 Id.
26 Id.
5
Finally, the third “people problem” of the legal industry is the lack of diversity of its
employees. Although overall representation of minorities in the U.S. population equals
approximately thirty percent, the American Bar Association’s Presidential Advisory Council on
Diversity in the Profession (ACD) reports that “nearly 90% of the legal profession is white, with
racial and ethnic minorities making up the remaining 10%-11%.”27 According to U.S. census
data, the practicing attorneys of color consist of – .2% American Indian or Alaskan Native; 1.1%
Mixed racial, non-Hispanic background; 2.3% Asian; 3.3% Hispanic, and 3.9% Black.28
Furthermore, research suggests that minority attorneys have higher rates of job dissatisfaction
and attrition than other attorneys.29 Although the attorney job satisfaction survey results do not
specifically report the attitudes of minorities, the higher attrition rates imply greater job
dissatisfaction. “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; . . .
Minority men were reported as having departed at the rate of 17.5% annually, the highest for any
group, and . . . [a]mong lateral associates, minority women were most likely to depart, with
24.9% doing so annually.”30
This information about widespread job dissatisfaction, high attrition rates, and poor levels
of diversity suggests that legal employers are not doing an adequate job of creating an optimal
work environment. As previously mentioned, in today’s highly competitive, global legal services
industry, where employees are the most important resource and the basis of a firm’s competitive
advantage, resolving these issues can be of great benefit to the industry. For example, while job
dissatisfaction does not always lead to turnover and the optimal rate of attrition/turnover for most
27 Diane Abraham, The Critical Need to Diversify the Pipeline into the Practice of Law: Previews of the Upcoming
ACD Report, at http://www.abanet.org/leadership/councilondiversity/factsandstats.html (last visited Jan. 9, 2006)
28 Id.
29 NALP Foundation, supra note 21.
30 Id.
6
organizations is greater than zero31, the simple fact that research shows the average cost of a
lawyer departing a large law firm is approximately $200,000 to $500,00032 supports the
conclusion that reducing attrition can contribute to a firm’s bottom line. Using averages of the
statistics discussed above, the total cost of a 19.3 percent attrition rate for 375 attorney law firm
at $375,000 per attorney is approximately 25 million dollars! Furthermore, other business
“organizations devote resources to diversity initiatives because they believe diversity is a
business imperative and good for the bottom line.”33 “Demographic shifts in the U.S. labor
market, specifically the projected rapid growth of the minority labor force over the next 10
years” will require organizations to reach out and embrace an increasingly diverse workforce so
that they attract and retain the best talent and deal effectively with an increasingly diverse
customer base.34 Additionally, although no study of the correlation between law firm diversity
and profitability has been published, the fact that twelve of the twenty most diverse firms as
rated by the Minority Law Journal35 also are also among the top 100 most profitable firms in The
American Lawyer’s annual ranking is noteworthy, as is the fact that ten of those twelve are the
top 50 of the most profitable firms.36 Finally, because “a growing number of corporate clients
now include diversity as hiring criteria,” the correlation between law firm profitability and
diversity will likely become stronger in the future.37 In summary, addressing the “people
31 Arie C. Glebbeek & Erik H. Bax, Is High Employee Turnover Really Harmful? An Empirical Test Using Company
Records, 47 ACADEMY OF MANAGEMENT JOURNAL 277, 278 (2004).
32 Amy Sladczyk Hancock, Taking Responsibility for Your Own Professional Career Development, 2005 CLEO
MID-SUMMER PROFESSIONAL DEVELOPMENT SEMINAR 22 (citing Project Attorney Retention – American
University, at http://www.pardc.org/).
33 Jayne, M.E.A., & Dipboye, R.L., Leveraging Diversity To Improve Business Performance: Research Findings
And Recommendations For Organizations,. HUMAN RESOURCE MANAGEMENT 409 (Winter 2004).
34 Id.
35 Emily Barker, Diversity Scorecard: True Colors – Not All Diversity is Created Equal, MINORITY LAW JOURNAL,
Summer 2005, at 20.
36 Aric Press, The Am Law 100: The Billion Dollar Club Expands, THE AMERICAN LAWYER, July 2005, at
http://www.law.com/servlet/ContentServer?
pagename=OpenMarket/Xcelerate/View&c=LawArticle&cid=1119875747796&t=LawArticle.
37 Nathan Koppel, Courting Shell, THE AMERICAN LAWYER, June 24, 2004, at http://www.law.com/jsp/article.jsp?
id=1087855518341
7
problems” in the legal industry will probably positively affect large law firms’ financial
performance.
Part III
This essay asserts that to solve these “people problems,” large law firms must do a better
job of recruiting and attracting a qualified and diverse pool, do a better job in the selection
process of identifying individuals who will perform well and “weeding out” the problems, and
do a better job of retaining those selected and identified as high potential candidates.38
“Recruitment involves searching for and obtaining qualified applicants for the organization to
consider when filling job openings. It is the first step in the hiring process. Recruitment stops
short of selecting among applicants to decide which individuals should be hired,”39 while
“selection is the process of obtaining and using information about job applicants in order to
determine who should be hired.”40 “Selection begins with an assessment of the requirements to
be met by the new hire, including the technical aspects of a job and the more-difficult-to-quantify
organizational needs. Applicants are then assessed to determine their competencies, preferences,
interests, and personality.”41
However, recruiting and selecting people to meet the organization’s human resource
needs are only half the battle in the war for talent.42 The other half is retaining or keeping these
people.43 There is a substantial body of research to guide human resource professionals in
meeting these challenges;44 yet despite the fact that this “research can provide some clarity
38 Ann Marie Ryan & Nancy T. Tippins, Attracting and Selecting: What Psychological Research Tells Us, 43 HUMAN
RESOURCE MANAGEMENT 305 (Winter 2004).
39 SUSAN E. JACKSON & RANDALL S. SCHULER, MANAGING HUMAN RESOURCES THROUGH STRATEGIC
PARTNERSHIPS 216 (Thomson South-Western) (2006).
40 Id. at 262.
41 Id.
42 Id. at 219.
43 Id.
44 Ryan, supra note 38, at 305.
8
regarding what works and what does not,” a great deal of it “has not been widely embraced by
the HR practitioners.”45 Arguably, traditional “big business” has done a better, although not
necessarily a sufficient, job of incorporating these lessons into their recruiting, selection and
retention efforts than the legal employers. Business research can provide helpful insights about
what recruiting and selection tools work, how selection-tool use relates to workforce diversity,
and what retention strategies work.46 Therefore, human resource practitioners in the legal
industry should take the time to create new recruiting, selection, and retention programs that take
into account current, business research findings. Specifically, legal, human resources staff
should execute a fully integrated, strategically aligned system, which modifies the present
compensation driven recruiting strategy, develops valid selection criteria, uses more reliable and
diversity-sensitive selection tools, such as structured interviews and work samples, and
incorporates and emphasizes desired, non-monetary incentives, such as firm career development
and mentoring programs, flexible work schedules, and non-cash recognition. However, before
thoroughly discussing these suggestions to improve legal human resource management practices,
the following section outlines the present, large firm recruiting and selection process.
Part IV
Although “law firms have changed their hiring practices dramatically during the last
thirty years,”47 the current system still has not bridged the gap between research and practice.
Firms now expend enormous resources recruiting law students for summer and full-time
45 Id. at 305-06.
46 Id. at 305.
47 David B. Wilkins & G. Mitu Gulati, Why are There so Few Black Lawyers in Corporate Law Firms” An
Institutional Analysis, 84 CAL. L. REV. 493, 545 (1996).
9
positions.48 However, “notwithstanding the vast sums that firms spend annually on recruiting,
they collect little information about a law student’s actual substantive legal knowledge or skills,
and the information that they do acquire on these issues is generally ignored.”49 After initial
resume screening, the law firm hiring process typically consists of the on-campus interview, the
call-back interview, and (for first and second year students) a summer internship.50 Initial
interviews usually consist of a brief twenty to thirty minute discussion with a single lawyer, who
is often an associate.51 “Although the interviewer has access to the candidate's resume (including
his transcript) prior to the interview, it is rare for an interviewer to ask questions designed to test”
the applicant’s substantive knowledge or skills.52 Instead, this initial, brief encounter is usually
consists almost entirely of “a discussion of the applicant's general interests, background and
experience, and whatever questions the applicant has about the firm.”53 Surprisingly, “firms
rarely supplement the information they receive from resumes and interviews with other
information (e.g., writing samples, faculty recommendations) that might offer insight into an
applicant's quality.”54 Consequently, firms often “make call-back decisions based on the
information that appears on an applicant's resume and transcript and a single lawyer's assessment
of the candidate's general promise and personality.”55 Therefore, “not surprisingly, grades and
other traditional indicia of academic accomplishment (such as law review membership) figure
prominently in this calculation.”56 However, “rather than ranking candidates by academic
standing, firms tend to use loose grade cutoffs pegged to the academic standing of the applicant's
48 Id.
49 Id at 546.
50 Id.
51 Id.
52 Id.
53 Id. at 547.
54 Id.
55 Id.
56 Id.
10
school. Within these rough and malleable ranges, the primary criterion is whether the candidate
will ‘fit in’ to the firm's culture.”57 Furthermore, “most call-back interviews merely repeat this
pattern. Although applicants see more lawyers, the content of these discussions mirrors what
transpires on campus: candidates are asked almost no substantive questions and the primary issue
is whether the applicant will ‘fit in.’”58
“This lack of attention to quality in the first two phases of the recruiting process might be
understandable if firms relied on their summer programs to monitor and evaluate summer
associates before extending offers of permanent employment,”59 but statistics suggest that they
do not since “many of the country's most prestigious firms grant offers to all of their summer
associates.”60 Furthermore, an analysis of the overall likelihood of an associate receiving a
‘permanent’ offer at elite firms in five major cities revealed the all the offer rates exceeded
seventy percent, with some as high as ninety percent.61 “Moreover, like associate salaries, these
percentages have remained remarkably consistent over time, even during the recession when
firms were laying off ‘permanent’ associates.”62 Finally, summer associate experiences tend to
be idealistic where law students are compensated at the same rates of first-year associates but
often do little work and are not provided with a realistic view of what working at an elite law
firm is like.63
Part V
Considering the previous discussion about large law firms’ “people problems,” the human
resource management practices of the large law firms are not producing optimal results. The
57 Id.
58 Id. at 547-48.
59 Id.
60 Id. at 549.
61 Id.
62 Id.
63 W.S. Ricks, I Quit!, THE NATIONAL JURIST, November 2005, at 23.
11
high associate salaries, which “are now a standard fixture of the elite law firm world”64 and
overwhelmingly exceed salaries in most entry-level jobs, almost guarantee that a large number of
students will express interest in these firms. In fact, “many students state that the high salaries
paid by corporate firms are the primary reason they choose jobs in this sector over what they
consider to be more rewarding work in government or public interest practice.”65 This
compensation strategy or lead pay policy, accomplishes the recruiting objective of attracting a
large number of applicants; however “a concern is whether the additional pay attracts and retains
the best—or merely the most—applicants.”66 “In a fully integrated, strategically aligned system
for managing human resources, recruiting activities are developed with a full appreciation for
how they may affect other parts of the system, and how other parts of the system may affect
recruiting activities.”67 Considering the discussion of widespread job dissatisfaction and high
attrition rates, along with other negative consequences of this strategy detailed below, this
compensation driven recruiting strategy is misguided, though on the surface effective.
Conversely, a close of examination of the selection process yields no justifiable
explanation for the present strategy employed by most elite law firms. The compensation driven
recruiting strategy yields large numbers of applicants; consequently, both to deter some,
interested law students from applying and to weed out a significant portion of the students who
express interest, law firms use traditional and seemingly objective indicators of high academic
performance, such as law school reputation, class rank and law review or journal credentials, to
reduce the pool of students they invite for interviews.68
64 Wilkins, supra note 47, at 530.
65 Id. at 532.
66 JACKSON, supra note 39, at 394.
67 Id. at 222.
68 Wilkins, supra note 47, at 547.
12
However, although these indicia “are loosely correlated with both substantive legal
knowledge and important personal characteristics such as intelligence and effort, they are
notoriously noisy when it comes to predicting future performance as a lawyer (as opposed to
future performance as a law student).”69 Many attorneys believe these credentials are not
“reliable indicia of a law student’s ability as a practicing attorney,”70 and statistics demonstrate
that these signals are not prerequisites for success. For example in a research study funded by
the Minority Corporate Counsel Association, “of 1,833 partners surveyed, 48.2 percent went to a
top 10 law school, 20.2 percent had law review experience, 25.9 percent graduated with honors
(magna cum laude, summa cum laude, or cum laude), 13.9 percent did a clerkship, and 8.7
percent were inducted into the Order of the Coif.”71 Considering this data and the fact that
“typically, the objective of selection is to predict the likely future performance of applicants,”72
law firms’ use of this selection criteria seems illogical. “In order for the objectives of selection
to be met, selection practices need to do more than assess the technical capabilities of applicants;
they must also assess whether the organization is likely to satisfy the applicants’ preferences and
keep them motivated over the long term;”73 yet both the individuals, who have reach the pinnacle
of success in the profession, assert and research shows no direct correlation exists between the
selection criteria and the definition of success.
Therefore, not only is it arguable that law firms’ present selection practices fail to assess
the capabilities of applicants, but it is also unsurprising that attorneys report being dissatisfied
with their jobs and that attrition rates are high. When making selection decisions, law firms
should be making predictions about how the law students will perform in the future, how long
69 Id. at 549.
70 MINORITY CORPORATE COUNSEL ASSOCIATION, THE MYTH OF THE MERITOCRACY: A REPORT ON THE BRIDGES
AND BARRIERS TO SUCCESS IN LARGE LAW FIRMS 3 (2003).
71 Id.
72 JACKSON, supra note 39, at 262.
73 Id.
13
are they likely to stay, whether they will be good organizational citizens, etc.74 However, the
screening stage of the selection process, which law firms use to narrow the pool of applicants, is
flawed because the criteria utilized are not adequately predictive of the likely future performance
of applicants.
The interviewing stages of the law firm selection process are similarly deficient.
Determining whether or not applicants will fit into the culture of the organization is important,
but this is not the only assessment that should be made during this portion of the selection
process. Unstructured interviews can “measure a variety of skills and abilities, particularly
noncognitive skills (e.g., interpersonal skills, leadership style, etc.),”75 but because specific
standards for evaluating responses usually are not used, research shows that this unstructured
interview format generally provides unreliable, inconsistent results and is not a good predictor of
job applicants’ job and organizational outcomes.76 Furthermore, research also shows that
unstructured interviews adversely impact diversity.77 On the other hand, structured interviews, in
which “all the applicants are asked the same questions in the same order” and the interviewer
uses a “prepared guide that suggests which types of answers are considered good or poor, have a
less substantial impact on diversity78 and are generally more valid and reliable, particularly when
the interviewers ask substantive and behavioral questions relevant to the type of work the
applicant will perform.79 Therefore, not only should the on-campus and call back interviews be
designed to determine whether a student’s personality is a match for that of the organization, they
should also “assess skill, ability, knowledge, personality, and behavioral styles.”80 However, as
74 Id. at 271.
75 Ryan, supra note 38, at 307.
76 JACKSON, supra note 39, at 283.
77 Ryan, supra note 38, at 307.
78 Id.
79 JACKSON, supra note 39, at 283.
80 Id. at 271.
14
previously mentioned, the content of most law firm interviews usually does not include
substantive questions. Consequently, the interview portion of the selection process is also
inadequate because law firms are not using a structured format, which does a better job of
providing reliable and valid data to both compare candidates, more accurately assesses whether
their skills, abilities, knowledge, personality, and behavioral styles are a fit for the job and
organization, and produces a less substantial, negative impact on diversity.
Finally, these law firms completely waste the perfect opportunity to gather meaningful
evaluative information during the last stage of the selection process, the summer clerkship.
Research shows that using work samples, “which measure job skills . . . using the actual
performance of tasks that are similar to those performed on the job,”81 as a selection tool is
absolutely the best way to predict job applicants’ job and organizational outcomes.82
Unfortunately, as previously discussed, summer associate experiences tend to be idealistic, with
the clerks producing little work. Both due to the short duration of the clerkships and the law
firms’ deliberate efforts to “shield the summer associates from the grinding reality of practice by
giving them little work and allowing them lots of time to socialize . . . The end result is often
culture shock when the summer intern becomes a first year associate, relegated to long, tedious
hours of work.”83 In short, the summer associate programs are principally used simply as an
extension of the recruiting process rather than as the key tool in the selection process. Therefore,
although these internships provide most valid and reliable means of evaluating candidates, law
firms are not maximizing the benefits of this stage of the selection process.
Law firms are also losing the retention battle. Studies show that “40 percent of entry-
level hires today will depart their firms within three years of being hired . . .Sixty-two percent
81 Ryan, supra note 38, at 307.
82 Id.
83 Ricks, supra note 63, at 23.
15
will move on after four years and 78 percent will be gone within five years of being hired.”84
Experts say that “today, it’s not more money that is calling to these associates so much as the
chance of a more balanced life, better working conditions and better opportunities for mentoring
and meaningful work.”85 Yet, law firms have been slow to implement changes to stem these
departures. One “key to retention is being smarter on the front end” when a firm hires by
presenting an honest picture of the working conditions and culture and selecting qualified
applicants who are a match.86 However, as previously discussed, the present recruiting and
selection process is flawed. It neither presents an honest picture nor does an adequate job of
selecting qualified applicants who are a match. Additionally, most law firms do not offer the
lifestyle benefits that associates desire, such as in-house childcare, formal mentoring programs,
flexible schedules, and diversity programs.87 Finally, the industry’s lead pay policy also prevents
firms from being able to offer more work-life balance because of the omnipresent “pressure to
increase profits –which translates into more billable hours.”88
In summary, although law firms’ compensation strategy makes it easy to attract a large
pool of qualified talent, the present selection process is flawed and does not effectively predict
job applicants’ job and organizational outcomes; consequently, associate attrition rates are high.
Additionally; law firms have not executed programs to help retain associates.
Part VI
A substantial body of business management knowledge exists, which can help law firms
improve its recruiting, selection, and retention practices and address the widespread
84 Id. at 19.
85 Id.
86 Id. at 23.
87 Id. at 22.
88 Id.
16
dissatisfaction, high turnover, and lack of diversity. The following recommendations take this
current research into account, and, if implemented, should address the previously discussed
deficiencies.
“Like many other aspects of an organization’s approach to managing human resources,
total compensation can facilitate (or interfere with) achieving many different strategic
objectives.”89 For example, the ever-spiraling increase in salaries is one of the key reasons that
law firms require associates to bill so many hours, but the fact that associates must bill these
hours is one of the key reasons that job dissatisfaction is widespread and attrition rates are high.
Therefore, the first change law firms should make is to reduce the salaries of entry-level
associates. This will be a bold step, that will introduce additional recruiting challenges, but as a
part of an integrated human resource management system, it will reap the law firms substantial
tangible and intangible rewards. Labor costs will immediately drop due to this reduction, and the
lower billable hour requirement that results should help increase attorney job satisfaction by
providing more work-life balance and, in turn, reduce turnover costs by eliminating the $200,000
to $500,000 average cost of each departing lawyer.
To determine the optimal salary level or the amount salaries can be reduced and remain
competitive in the relevant labor market, law firms should conduct and/or purchase pay surveys
to determine exactly how much of a premium they are paying over other comparable entry-level
positions. Additionally, a thorough financial analysis will also show exactly how much salaries
must be reduced to achieve a more managing billable hour requirement. A possibility also exists
that finding the correct balance between billable hours and salary levels will lead to a
competitive advantage because if turnover and training costs for a firm are significantly reduced,
the firms’ partners could potentially maintain the same profit margins while reducing their bill
89 JACKSON, supra note 39, at 362.
17
rates to a level that might attract more business. In summary, a firm’s compensation strategy is a
very important piece in both the human resources management and overall competitive business
strategy, and determining the optimal adjustments and making these changes will likely result in
significant rewards.
Reducing compensation levels will make the recruiting process more difficult because
some of the most sought after students will always choose the additional income over more
work-life balance. However, along with this change, law firms must also execute a
communication plan, which explains the reasons for and benefits of the salary reductions.
Additionally, the firm should emphasize the other reasons that students choose big firms
training, interesting and challenging work, the chance to work with exceptionally talented
colleagues, and desire to keep future professional opportunities that require experience at a large
firm open.90 Furthermore, to offset the salary reductions, firms can offer non-monetary
incentives that attorneys consider effective, such as formal career development and training
programs, flexible work schedules, and non-cash recognition.91
Business research and best practices can also help to improve law firms’ selection
process. Although the reduction in salaries, will likely result in fewer applicants, the optimal
salary level will probably still be well above the average salary level of other entry-level, legal
opportunities; therefore, the applicant pool will remain large. Consequently, law firms will still
need a system, which will them to effectively and efficiently choose which students should
receive an on-campus interview. However, using the traditional and seemingly objective
indicators of high academic performance, such as law school reputation, class rank and law
review or journal credentials, is not the answer since these criteria do not adequately predict
90 Patrick J. Schiltz, On Being a Happy, Healthy, and Ethical Member of an Unhappy, Unhealthy, and Unethical
Profession, 52 VAND. L. REV. 871, 897 (1999).
91 What Works Now with Retention? 05-2 Compensation & Benefits for L. Off. 8 (Feb. 2005).
18
future performance as a lawyer. As previously mentioned, “in order for the objectives of
selection to be met, selection practices need to do more than assess the technical capabilities of
applicants; they must also assess whether the organization is likely to satisfy the applicants’
preferences and keep them motivated over the long term.”92 To accomplish these goals, law firms
must completely overhaul this portion of the selection process by establishing the criteria of
interest, choosing the appropriate predictors and assessment techniques to measure the criteria,
and synthesizing the information collected before making the selection decision.93 In other
words, law firms should first determine the competencies an entry-level attorney must possess
both to perform successfully as a young associate and to accumulate the necessary skills to move
up the firms’ career ladder. For example, “since the life of an associate in a big firm litigation
group is dominated by library research, writing briefs, drafting discovery requests, and
responding to discovery requests,”94 legal research and writing skills should be a primary criteria
of interest.
To establish predictive selection criteria, the human resource professionals should first
conduct a worker-oriented job analysis that focuses on the characteristics necessary to perform
well as a lawyer or create a competency model, which describes the skills, knowledge, abilities,
values, interests, and personality of successful, entry-level attorneys.95 “For each predictor of
interest—each competency, personality characteristics, and so forth—many different techniques
can be used to assess applicants;”96 therefore, the next step in overhauling the selection process
involves the law firm’s human resource professionals determining the most effective and cost
efficient methods available to accurately measure whether an applicant possesses the knowledge,
92 JACKSON, supra note 39, at 262.
93 Id. at 269.
94 Schiltz, supra note 87, at 927.
95 JACKSON, supra note 39, at 180.
96 Id. at 271.
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skills and abilities necessary to be a successful lawyer. Not only must they choose assessment
techniques with high validity and reliability, but they also must consider the costs and benefits of
the available choices. Research shows that some of the selection tools with the highest validity
and reliability are work samples and structured interviews.97 Both these tools have relatively
high development and administration costs, but “the goal is not to simply reduce these costs.98
Expensive means of acquiring information may be worthwhile if they enable the organization to
make better decisions and if substantial consequences are attached to making better decisions.”99
In fact, “in the past 20 years, numerous studies have demonstrated that well-designed selection
practices pay off handsomely.”100 The researchers have demonstrated that companies that use
these practices such as validation studies and structured interviews have higher levels of annual
profit, profit growth, and overall performance, and the relationship between use of these
practices and bottom-line performance was especially strong in the professional service
sectors.101 For example, instead of focusing on grades, which tend only to measure how well a
student performs on exams that do not typically resemble the conditions under which practicing
attorneys work, law firms should obtain work samples to assist in the initial, pre-interview
screening process by sponsoring writing contests at law schools at which they principally recruit.
These contests will challenge students to produce a memo or brief under conditions similar to
those that might encounter when receiving an assignment from a senior associate or partner. Not
only would writing/work simulation contests allow the law firms to receive standard work
samples from all the interested applicants, which the hiring committee could use as an initial
97 Ryan, supra note 38, at 307.
98 Id.
99 JACKSON, supra note 39, at 264.
100 Id.
101 Id.
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screening mechanism, but they would also likely serve as firm recruiting and marketing tools,
which might stimulate additional student interest in the firm.
Next, law firms should design and implement a structured interview process to utilize
during both the on-campus and campus interviews. During the on-campus interviews, trained,
human resource professionals should ask all applicants the same substantive and behavioral
questions, which should be directly related to the entry-level legal work that associates generally
perform. They should then judge the responses using behavioral anchors the legal professionals
have deem relevant and important for success as a new attorney. For example, the law firm can
develop a series of structured questions, which test a candidate’s knowledge of research tools and
gauges appropriate behaviors when an associate is given vague research and writing tasks. Not
only will this process provide more valid data, it will save the firm money because their
practicing attorneys will not spend valuable time, which they could spend billing clients, to
screen candidates, most of whom will not make it to the next stage of the selection process.
During the call-back interviews, the law firms can utilize a mixture of structured and
unstructured interviews. The structured interviews should allow attorneys, who have also been
trained by the human resources department to conduct effective interviews, to ask substantive
questions about legal research and writing and the particular practice areas in which the
candidate has expressed interest. A different group of attorneys can use a less structured
interview format to measure “fit,” interpersonal skills, leadership style, and other noncognitive
aspects important to the general practice of law. In summary, using a combination of structured
and unstructured interviews should yield more useful data that will help firms make a more
informed decision about which applicants should receive offers for summer employment.
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Finally, whereas firms presently focus on “fit” during the interview portion of the
selection process, determining whether or not applicants are a match for the culture of the
organization is best determined during the summer associate experience, especially if candidates
are allowed to function in a more realistic, rather than idealistic law firm environment. Firms
can still utilize social events to evaluate how students interact with the other practicing attorneys,
but they should stop deliberately shielding the summer associates from the grinding reality of
practice by giving them little work and allowing them lots of time to socialize. Furthermore, if
summer associates are given more opportunities to deliver actual work product under realistic
practice conditions, the firms will have yet another tool, which it can use to evaluate these
applicant and predict long-term, job and organization outcomes.
Finally, if these suggestions to modify the recruiting, selection, and retention process are
implemented, they are likely to increase diversity. No available data suggests that women and
minorities are less interested or more difficult to recruit into large law firms.102 However, women
and minorities have previously and continue to face express and institutionalized, discriminatory
barriers to entry into this sector of the legal profession.103 Business research suggests that the
present hiring and recruitment strategies of large law firms, such as employee referrals and
unstructured interviews, affect diversity in adverse ways.104 However, modifying the selection
process in the ways previously recommended should positively affect law firm diversity since
management research reports that selection tools, such as, work samples and structured
interviews, either positively affect diversity or produce minimal adverse impact.105 Moreover,
since statistics show that women and minorities have higher dissatisfaction and attrition rates,
offering more career and lifestyle benefits, such as formal career development and mentoring
102 Wilkins, supra note 47, at 508.
103 Id. at 509.
104 Ryan, supra note 38, at 310.
105 Id. at 307.
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programs, flexible work schedules, and non-cash recognition, may also help both to bolster
retention and increase diversity.
In summary, legal, human resources staff should execute a fully integrated, strategically
aligned system, which modifies the present compensation driven recruiting strategy, uses valid
criteria and selections tools, such as structured interviews and work samples, which more
reliably indicate future performance and promote diversity, and incorporates and emphasizes
desired, non-monetary incentives.
Conclusion
Though the large law firms operate much like traditional businesses, the presence of high
levels of job dissatisfaction and attrition and low levels of diversity, are evidence that their
recruiting, selection, and retention policies and programs are not effective. A substantial body of
management research offers solutions, but a gap still exists between theory and practice.
However, this research definitely suggests that changing the compensation strategy, utilizing
more valid criteria and reliable, diversity-sensitive selection tools, eliminating the practice of
creating an artificial environment during the summer associate programs, thoroughly evaluating
the work product produced during the clerkships, and implementing desired non-monetary
incentives and retention programs will help law firms address their “people problems.”
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