Retaining Valuable Associate Lawyers — But for How Long and Why?

For those of you who care about what is going on in Big Law, here is a new development worth checking out — and with critical eyes.

Weil Gotshal & Manges announced last week that the firm “hopes to improve associate retention by cutting the wait for partnership” from 9 1/2 years to 7 1/2 years.  Sounds good, right?  Still a long time to wait for partnership, but better by two years.  The firm also stated that “substantially all” of the 7 1/2 year associates will be promoted to partner or counsel.

That takes a little more explaining. 

  • New partners will be fixed-income and not equity. 
  • New counsel will be in one of two categories:
  • Some counsel “in specialty practices” will remain counsel for as long as they stay at the firm.
  • Other counsel (presumably in non-specialty practices) can stay in those positions for up to three years.  During that time, they may be promoted to partner.  If they are not promoted, they will be transitioned from the firm.  As in OUT.  “Transition” is described this way by the executive partner of the firm:  “If  they don’t become partner, they will have a title and more money to then go out and look for a job.”

Sounds well-meaning, right?  Doing what’s best for hard-working young lawyers, right?  The final statement in the article, further quoting the executive partner, is telling, however.  “We expect to retain significantly more senior-level associates, which will clearly improve leverage, increase revenue, decrease the cost of hiring laterally.”

The operative word there is “leverage.”  To fully understand what may be the motivation behind this move by Weil Gotshal, you need to know that law firms REALLY do not want to lose senior associates — because they are VERY profitable to the firm.  In fact, it is widely-recognized by Big Law and former Big Law lawyers that firms will heap praise on most 4th, 5th, 6th and 7th year associates just to keep them around for a few more years of this kind of high profitability.  But, when partnership decisions are made, only a select few of those associates will be promoted to partnership.

You also need to understand that replacing departed senior associates is very expensive for law firms.  Statistics show that it can cost up to $500,000 to replace a single senior associate.  If that sounds like a lot to you, consider the costs associated with attorney search firms, revenues lost interviewing instead of billing hours, and revenues lost while transitioning work to avoid double billing.  It all adds up.

There is a lot to think about here.  You can expect other Big Law firms to follow with similar programs to be competitive in the market.  Don’t forget to look behind what may be paternalistic declarations in press releases.  Sometimes things are not exactly what they seem.

To learn more about the new Weil Gotshal program, check out the article.

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