Law Firms: the Cost of Hiring and Attrition

Law Firms: the Cost of Hiring and Attrition-0

Law Firms: the Cost of Hiring and Attrition

Written by Desiree J. Nordstrom, Founding Partner and Attorney, Overflow Legal Network, LLC.

All business owners know that mistakes in hiring can cost your business a lot of money. This also holds true in the legal industry. Right Profile and JD Match recently conducted an online assessment of more than 1,400 people as they sought to learn if it might “be possible to reduce the high costs of turnover…in the legal industry.”[1]

The report concludes that the current strategies that law firms use for recruiting and development are “broken.”  Law firms use “painfully antiquated” hiring practices that include using GPA, school attended, law review, or moot court participation, even though those metrics do not truly correlate to a successful career in a law firm.

Attrition CostsThe report states that “the costs of attorney recruiting and attrition are taking an ever-increasing toll on each firm’s bottom line. The nation’s largest law firms spend billions of dollars each year to recruit, train, and ultimately lose lawyers from their ranks.” When an attorney leaves a firm, the cost to the firm ranges from $400,000 to more than $800,000 (for experienced attorneys). Turn over costs the legal industry roughly $9.1 billion annually in just the 400 largest firms in the United States.

It is staggering to see the numbers behind what we, at Overflow Legal Network, already know to be an opportunity in the legal industry. It is true; we see this as an opportunity. Bypassing the old hiring habits and instead contracting legal work to OLN freelance attorneys will cut law firms’ overhead costs. The costs of recruiting, interviewing and training are drastically lowered by using an experienced freelance attorney. Add to that not having to pay for the benefits that a traditional firm hire would receive, and the savings are real and significant.

When law firms are dramatically lowering their costs, revenue increases. Law firms can choose to pass this savings onto their end clients. And in doing so, clients see value and continue to return. When clients are happy, they tell other potential clients, increasing business. And now that the law firm isn’t recruiting, interviewing and training new hires, it has more time to focus on practicing law.

If your firm would like to cut your costs associated with hiring and attrition, contact Overflow Legal Network here. We are the support your law firm needs.

 

[1] The report is available here: http://therightprofile.com/law-firms/

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