How to Address Associate Attrition

The NALP Foundation for Research & Education published a survey in late 2000 called “Beyond the Bidding Wars: A Survey of Association Attrition, Departure Destinations & Workplace Incentives.” The data indicate that associate attrition, while slightly down from the foundation's 1997 survey, is still at alarming levels. Perhaps more important, entry-level associate compensation levels had increased in most markets by 25 percent to 45 percent, since the 1997 survey was conducted. This suggests that compensation alone does not appreciably slow attrition. Moreover, because of the significant increase in compensation costs, the levels of attrition reported in 2000 had an even greater impact on firm profitability than before.

Numerous law firms that works with have studied the “cost of human capital” in terms of associate turnover and determined the “hard and soft” costs to be in excess of $300,000 per lost associate in major markets, where the salary levels are highest. Since most large firms lose more than 15 percent of their associates per year, by this measure, a 400-lawyer firm is losing more than $12 million per year because of associate attrition alone.