Money doesn't always talk - Firms need to think outside the box to retain associates

The big news in the legal market in 2021 was the massive increase in salaries and the huge demand for associates. As the economy reopened and firms scrambled to meet client demand, salaries reportedly rose a minimum of 15% and by as much as 50%, with some graduates sitting pretty with a starting salary of £150,000.

With so much movement prompted by lawyers quitting to find better paid jobs amongst the demand, vacancies for London-based associates reportedly rose by 131% year-on-year between January and November last year.

The start of 2022 appears to be telling a very similar story. Law firms have increased their salaries yet again, with Milbank taking the lead and increasing NQ salaries up to $215,000, shortly followed by the likes of Goodwin Procter, Cadwalader, Fried Frank and McDermott Will & Emery.

However, we at DMJ don’t see this trend continuing for much longer. Firms won’t be able to keep up the frantic pace of this salary war and the next couple of years will see a slowdown in hiring and potentially even some layoffs. 

To ease the rapid movement that the job market has been seeing, we also believe firms will be more strategic if they want to retain their associates. Increasing salaries and bonuses isn’t the be-all and end-all – it does nothing to combat the burnout associates have been feeling across the board for the past few years and increasingly more so since the start of Covid.

Some firms have already taken action. Orrick, Herrington & Sutcliffe were hot off the mark back in March 2021 when they launched “Orrick Unplugged”, a scheme that encourages lawyers to take a week off work and credits them with 40 billable hours. Last October, O'Melveny & Myers jumped on one of the biggest Covid crazes and began offering employees Peloton subscriptions.

Goodwin Proctor is offering its associates the chance to spend a week at the beach, visit wineries, relax at a spa or take their family to a Disney attraction as part of their “Recharge with Goodwin” plan.

Mintz Levin recently announced that it would be expanding its compassionate leave programme for lawyers and staff to include 15 days of consecutive paid leave in the wake of a miscarriage, as well as five days of paid leave every 12 months following a failed surrogacy, adoption, or fertility treatment.

These solutions are a great way to help retain current employees now while the incentives to leave are stronger than ever but they short term in nature. Long-term, firms need to shift their thinking to consistently offer employment solutions through a detailed strategy to develop a reputation across the market as organisations that not only looks after their lawyers financially but through non-financial compensations incentives as well. Only then will these solutions work as both as an exercise in retaining current staff and attracting new legal talent as well.

The months ahead will surely see many more companies announce imaginative incentives that go beyond dollars and cents in order to keep hold of their staff and attract the best new recruits. We feel that these incentives will replace the wage war, offering legal professionals it all – attractive salaries coupled with exciting incentives and benefits.

What incentives would encourage you to sign on the dotted line or is salary indeed the be-all and end-all for you?