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The Judge Rules: Anything less than a 100% qualifying lawyer retention is a law firm fail

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Training contracts provide large global practices with a recruitment safety net — but that’s not good for their businesses

Newly-qualified solicitor retention rates are really the preserve of legal profession anoraks.

And as Legal Cheek has a full collection of the finest law train-spotters known to mankind, this website has been dutifully covering every announcement to seep from Square Mile and other corporate law firm personnel departments.

Of course, the obvious problem with retention rate figures is that the headline percentages are subject to disproportionate fluctuations owing to the relatively small cohorts of qualifying lawyers involved.

Even the most of muscular magic circle firms will not produce a qualifying pool of more than, say, 50, which means that retaining or jettisoning four or five here and there will significantly affect the top-line percentage.

Now the Judge is certainly no statistician — he generally ducked out of maths classes in favour of working out how many boys could sit round the elaborate ice-chilled bong one of the lads had fashioned from a water-cooler bottle.

However, common sense suggests that any cohort short of 50 is not going to supply very meaningful data regarding percentage shifts. So when some of the offices of the US firms in London record high retention rates, they do so against the backdrop of having as few as 15 — or even fewer — qualifying lawyers at their practices.

But the real issue about retention rates is this: should any firm be happy with anything less than 100%? Or put another way: Should anything less than 100% be deemed a management failure?

What other business — apart from multi-national corporate law — spends a fortune recruiting talent in the knowledge that it is not doing so for the long term? Banks and others in the financial sector and large corporations generally do not recruit with the caveat that in two years’ time as many as 30% or even 40% of those newbies will be walking out the door.

Those businesses are likely to put recruits on a six-month probation period, but the starting proposition is that everyone hired is there for the long term; if 40%, 30% or even 20% or 10% were gone after two years, serious questions would be asked of recruitment managers.

Law firm NQ retention rates highlight again the bizarre role of the training contract in the legal profession structure. It creates an extended probation period that arguably encourages laziness in graduate recruitment departments.

That laziness — which potentially allows law firms to take a punt on some candidates without being fully convinced of their suitability — will be good news for some wannabe lawyers: sneak under the wire and have a pop at proving yourself.

But it seems like poor business practice. For example, when Wall Street law firms recruit fresh blood in their home jurisdiction they must do so without the safety net of a training contract that allows them to bin those that did not work out two years down the road. Sure, they can get rid of people — but they have to fire them properly, with all the hassle and soul searching that should involve.

City law firms spend a lot of money and management time on their trainees. They not only pick up the tab for their vocational training fees, but they also lay on grants and then, of course, reasonable salaries when the greenhorns start their contracts.

Should the undoubtedly well-paid human resources executives at those firms be patting their own backs when they hit a retention rate of 80% or 85%. Shouldn’t every newly-qualified lawyer that they don’t retain be considered a mark of failure for those “talent” experts?


10 Comments

Anonymous

Most graduate programmes outside of law will see anywhere from 10-35% attrition rate. Law is a weird model where the mandatory 2 years means people stick around longer than they should for many different reasons (poor performance, relocating, actually doesn’t enjoy the job etc).

Retention rates of 75-90% are probably very healthy and actually more satisfactory than retaining 100%. If there was more flexibility in getting rid of trainees prior to qualification or trainees could swap firms part way through a training contract, the figures would be much worse.

(8)(1)

Anonymous

Banks and others in the financial sector and large corporations generally do not recruit with the caveat that in two years’ time as many as 30% or even 40% of those newbies will be walking out the door.

That couldn’t be further from the truth. Banks are probably the prime culprits for the above..

(6)(0)

Anonymous

Obvious clickbait is obvious

(6)(0)

Anonymous

No it isn’t.

Some observations
-The amount it costs to train a solicitor is seriously over-egged. It tends to discount the thousands of pounds that the trainee bills in the time he/she is at the firm. It’s not the massive loss “The Judge” seem to think it is.
-Lots of trainees leave on qualification because they want to leave. Maybe they were training as a means to an end that wasn’t private practice (like a job in house, or going into business); maybe they’d long ago realised that law wasn’t for them but wanted the qualification to carry over into their futures; maybe they wanted to qualify into an area of law that wasn’t available at their firm. The list is endless.
-Accountants, to whom lawyers are often compared with in terms of their training contracts pretty much all get the chance to stay after their training ends. So there’s not such a big deal made about retention. They are however pretty much all gone by 3 years PQE.
-10% drop out after 2 years suggests that you’re expecting people to stay in a job for 20 years. The 70s called, they want their employment model back. It’s now unusual for people to stay in the same play more than 5 years and friends of mine in IT consider over 2 years to be too long.

(8)(0)

Anonymous

The Judge needs to go and do some more research into the realities of the graduate recruitment market, both within law and outside of it before “ruling” anything. The points made couldn’t be any further from what actually drives retention rates and also how both trainees and other graduates are recruited.

(4)(2)

Anonymous

Precisely. At least get the facts right if you’re attempting to form a coherent argument.

Again, this:

“For example, when Wall Street law firms recruit fresh blood in their home jurisdiction they must do so without the safety net of a training contract that allows them to bin those that did not work out two years down the road.”

They are not fresh blood. The majority, if not all, will have spent a summer with the firm. It’s a completely different – arguably better – model.

(1)(0)

Anonymous

How can any employer be certain of a candidate’s suitability, especially when hiring graduates with limited experience?

It seems perfectly reasonable to me that an employer might change an opinion of a trainee after two years which was formed following a brief selection procedure. This doesn’t demonstrate failure, it just shows the inherent imperfections in hiring people based on limited information.

(6)(0)

Anonymous

Crap clickbait article.

100% at every firm is impossible. Grow up.

(4)(1)

D_T_T

An awful lot of legal reporting column inches seem to be devoted to NQ retention rates, probably because of the lack of firms releasing solid data about retention and promotion rates at higher levels. I’m not sure every single City firm’s decision to keep say 18 of its 21 trainees, translated into a percentage, and compared to last year’s percentage that was, say, two or three people different, needs to be the subject of an individual piece here, on The Lawyer, on Legal Week…

Why not go back at five years ‘ PQE and see how many people stayed, never mind how many people are partners five years after that? I understand the target audience of this particular site but there’s an awful lot of focus on bagging a training contract etc. Would be interesting to see a bit more about, say, the mechanics of going from a competent if unspectacular senior associate to partner, rather than how to get a TC with three Cs. I know there are some pieces like that on here, but a bit more about the range of career development would be good.

As for NQs… I’m always reasonably intrigued by how many people are enthusiastic, all guns blazing, “I will give it 110%” in the training contract search and NQ race, and then pack it in two years after they qualify.

(2)(0)

Boh Dear

I worked at a bank once. To say there was a revolving door policy would be a huge understatement. I’d be surprised if the number of people who stayed there for more than two years was over 70%, and I wouldn’t be surprised if as many as 50% headed for the door in that time.

(0)(0)

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